Angin Report Investing in Impact in Indonesia REV2

Report
INVESTING IN IMPACT
IN INDONESIA
Table of Contents
Investing in Impact in Indonesia - 2020

Acknowledgments i
Report Objectives iii
Report Methodology iv
Report Limitations v
Glossary vi
List of Abbreviations viii
Foreword ix
General Introduction x
1
Supply-side: A closer look at the investors funding impact
entrepreneurs
1.1 Introduction 2
1.2 Timeline: Evolution of the investment activity in Indonesia 2
1.3 Indonesia’s Impact Investment Landscape in 2020 3
1.4 Key insights 5
1.4.1 Concessionary vs. non-concessionary investment mindset 6
1.4.2 Team profile in impact investment 8
1.4.3 Gender lens investment on the rise 11
1.4.4 The development of blended finance 13
1.4.5 Mainstream investors: helpful allies in filling the gap and 15
building the capital continuum
1.4.6 Localization of impact investing 18
1.4.7 Investor thematic focus 20
1.4.8 Investors facing new challenges 22
1.4.9 Capital owners behind the Impact Investors 24
1.5 Impact Investing Case Studies in Indonesia 26
1.5.1 Introduction 26
1.5.2 Key characteristics 27
1.5.3 Recommendations 29
2
Demand-side: Hearing from the impact entrepreneurs
2.1 Introduction 32
2.2 Our approach: The fundraising journey 32
2.3 Key insights 34
2.3.1 Successfully funded social enterprises in Indonesia 34
2.3.2 Bargaining power during fundraising 35
2.3.3 Different perceptions of “opportunity” 36
2.3.4 Attention to impact during the fundraising journey 36
2.3.5 Bottom-up approaches of impact measurement and management 37
2.3.6 Expectations of support 38
2.4 Recommendations 39
2.4.1 Impact investment skills for investors 39
2.4.2 Tailor investment product development for the Indonesian impact market 39
2.4.3 Enable local partner assistance 40
2.4.4 Use impact measurement to guide both profit and outcome 40
3
Impact investment opportunities in Indonesia
3.1 Introduction 42
3.2 Impact investment opportunities in Indonesia 42
3.3 Four key investment opportunities 43
3.3.1 Impact Area One: Agriculture supply chain efficiency 43
3.3.2 Impact Area Two: Waste and circular economy 44
3.3.3 Impact Area Three: Gender lens investing 45
3.3.4 Impact Area Four: MSME development & digitalization 46
4
The impact investing ecosystem
4.1 Introduction 48
4.2 Visualizing the ecosystem 48
4.3 Ecosystem who is who 50
4.4 Ecosystem evolution and key trends 52
4.5 Key insights 53
4.5.1 From “beneficiary” to “customer” 53
4.5.2 The role of DFIs and development aid agencies 54
4.5.3 The rise of intermediaries 55
4.5.4 The rise of support on emerging themes: Gender and climate 56
4.5.5 Involvement of private corporations 57
4.5.6 Decentralized support: going outside Jakarta and Java 58
5
Policy and regulation
5.1 Government intervention evolution since 2013 60

5.2 Locating policies and recommendations in impact investment market 60
5.3 Key policy leaders 61
6
Zooming in on COVID-19 impacts
6.1 Introduction 67
6.2 The impact of COVID-19 on demand-side of impact investment 67
6.2.1 Agriculture supply chain efficiency 68
6.2.2 Waste and circular economy 69
6.2.3 Gender lens investment 69
6.2.4 MSMEs development and digitalization 70
6.3 The impact of COVID-19 on supply-side of impact investment 71
7
Conclusion
Conclusion 75
Appendix: Impact areas 77

Appendix: Detailed methodology 78
Appendix: Case studies 80
Appendix: Additional tables 81
Acknowledgments
This report was a collaborative effort between the Angel Investment Network Indonesia
(ANGIN) and some stakeholders. This independent report is part of the effort in advancing impact investment
development in Indonesia.
ANGIN Research Team
David Soukhasing Benedikta Atika
Research Co-lead Research Co-Lead

Managing Director, ANGIN Impact Investment Lead, ANGIN
(david@angin.id)
Stevie Susanto Aisha Nadira
Research Co-Lead Research Associate

Consultant, ANGIN Engagement Lead, ANGIN
Serly Marcelina Erik Hormein
Research Associate Research Associate

Consultant, ANGIN Consultant, ANGIN
Vicky Lay Saskia Tjokro
Main Research Advisor Research Advisor

Managing Director US, Head of Director of Advisory, ANGIN
Impact Investing, Artesian
Monica Yusuf Victoria Forsgate
Research Advisor Editor

Consultant, ANGIN Independent Consultant
Imam Sugiarto
Visual Designer
Independent Consultant
i
We would like to acknowledge all interviewees and contributors to this research report for sharing their
expertise, insights, networks and support including:
Alexander Irwan Marcel Neutel

Director, Partner,
Ford Foundation Indonesia Capital 4 Development (C4D)
Steve Rhee Maria Natashia

Senior Program Officer, Investment Manager,
Ford Foundation Indonesia PT Prasetia Dwidharma
Abindra Soemali Martin Tang

Associate, Co-founding partner,
SYSTEMIQ Genesis Alternative Ventures
Adi Sudewa Mason Tan
Senior Investment Manager, Founder / CEO,
Aavishkaar Capital Garden Impact Investment
Aruna Pradipta Mirko Zuerker

Associate, Head of Asia,
SYSTEMIQ SEED
Bangkit Oetomo Nadia Fonny

Investment Associate, Vice President,
Tropical Landscape Financial Facility (TLFF) Gobi Partners
Daniel Hersson Rani Sofjan

Team Leader and Consultant of Managing Director
Asian Development Ventures Bank (ADB) Ventures Northstar Group
Dondi Hananto Regula Schegg

Partner, Managing Director,
Patamar Capital Circulate Capital
Edward Ismawan Chamdani Samir Chaibi

Co-founder and Managing Partner, Principal,
Gayo Capital Insignia Ventures Partners
Elizabeth Tan Stefanus Suharjono

Venture Partner, Investment & Program Manager
Quest Ventures Plug and Play Indonesia
Ganesh Rengaswamy Tom Schmittzehe

Co-founding partner, Co-founder,
Quona Capital Moonshot Ventures
Joshua Agusta Virginia Tan

Venture Fund Director, Founding Partner,
Mandiri Capital Indonesia Teja Ventures
Jugnu Pati Vivi Laksana

Senior Investment Manager, Program and Partnership Director,
Bamboo at Capital Partners Kinara Indonesia
Kevin Moon William Gozali

Head of Impact Investment, Vice President,
Lonsdale Social Innovation Capital BRI Ventures
Klaus Oberbauer
Program Manager,
Ocean Plastic Prevention Accelerator | SecondMuse
ii
Report Objectives
Section Objectives for General Audience Objectives for Capital Owners
Part 1: Give an overview of what has happened on Review impact investing market progres-
Supply-side the supply-side since 2017 (date of last sion and understand how capital owners
(Investor) major research covering the impact invest- could help develop the supply-side of the
ment industry in Indonesia by GIIN). impact investing ecosystem.
Increase public awareness and under- Identify potential recipients for

standing of impact investing to bridge the Fund-of-Funds deployment
knowledge gap.
Showcase the best practices from major

investors in the impact investment field
representative investors of the best
practice investment landscape
Part 2: Understand social entrepreneurs’ percep- Review the condition of the impact invest-
Demand-side tion and expectation of impact investors ing market from the perspective of a social
(Entrepreneur) and their challenges in raising capital for entrepreneur.
impact investing due to impact investors’
value proposition. Identify areas where support is needed to
increase the deployment of impact capital.
Part 3: Identify areas of opportunity for impact and Identify areas of opportunity for impact and
Opportunities commercial (financial) return commercial (financial) return.
Identify fund managers targeting key

opportunity areas.
Part 4: Highlight the roles of other key players Identify potential entry points and support
Ecosystem beside impact investors in the “investing in needs of key stakeholders to accelerate
impact” market and how they interact with investing in impact ecosystem develop-
each other. ment.
Part 5: Update on the influence and involvement Build a communication channel with policy
Policy and of the Indonesian government in the makers to implement supportive regulation
Regulations “Investing in Impact” market. that further enables impact investing.
Part 6: Give an overview on how COVID-19 has Identify potential support that could be
Covid-19 impacted the investing market in Indonesia provided to reduce the severity of the
and how investors are responding. pandemic.
iii
Report Methodology
The following methods were used by the ANGIN research team to collect data and information covering the
period from 2013 to 2020:
Carrying out a desktop research and literature review that included industry reports (e.g. GIIN,
Intellecap, BCG) and research publications, company reports, documents from key Indonesian
policy leaders, and investor prospectuses.
Creating a database of investing in impact stakeholders from ANGIN proprietary databases, com-
pany websites, news searches, and publications. The database covers 351 fund managers (impact
and mainstream investors), 371 funded enterprises, and 80 ecosystem players (capital owners and
other intermediaries).
An online survey gathered responses from 89 entrepreneurs on their expectations and experi-
ence with impact investors during their fundraising process (November - December 2019).
The team held semi-structured interviews between May and August 2020 with 25 fund managers
to compile case studies based on their work, including on the impact of COVID-19. The team also
conducted interviews with 35 entrepreneurs for feedback on fundraising and spoke to three
ecosystem players to gain insights on impact areas they are working in.
It is important to note that this report presents data gathered on social enterprises that have
received funding from (but not exclusively) impact investors. Companies operating in impact
areas but have only received funding from mainstream investors over the past 10 years are not the
focus of this report.
iv
Report Limitations
Below is a brief explanation of the main limitations of the research process.
Data accessibility and availability

Private investment and impact investment benchmarking can be a difficult exercise especially in less estab-
lished private market segments combined with the restrictive nature of information flows within the industry.
Information disclosure
The most reliable source of information on impact investment performance since inception would likely be
generated via unaudited quarterly and audited annual financial statements. This information is typically readi-
ly available for limited partners (LPs). However:
Smaller institutional investors are not producing such reports.

Most fund managers are unable to share data with any third-party aggregator, given data restric-
tions.
We mostly assessed the performance of the investors through the known performance of their portfolios.
Performance capture
Unlike public stock portfolios that often have significant overlap with both market indexes and peer strate-
gies, private investments conducted by investors often have unique performance drivers that can differ to
their peers. The performance cycles for private Investors are dynamic, long and constrained by a defined
period. For instance, research shows that private equity, impact investors and Venture Capital (VC) funds do
not generally observe steady returns until 5 or 6 years after.
Remote collection of primary data

Due to COVID-19 restrictions and uncertainties, first-hand field visits and in-person interviews were not possi-
ble for all data collection. Interviews were mostly done over online calls.
Selection bias
A minor subset of operators managing non-active or sub-performing funds may have unknowingly provided
assumptions and selective insights to corroborate with their experiences.
v
Glossary
Term Definition
Ecosystem Stakeholders
Supply-side Stakeholders that provide capital to enterprises. Based on their ownership of the capital, the
(or Investor or supply-side is divided into two subcategories: capital owner (ultimate beneficial owner who
capital owner) controls the capital) and intermediaries (who facilitate capital disbursement).
Demand-side
Enterprises who need capital to carry out their impact entrepreneurial activities.
(or Enterprise)
Activities and entities owned and controlled by individuals or entities who have an agenda to
Private Sector make a profit.
Public Sector Activities and entities controlled by the government, whose agenda is to serve the public.
Investing in impact
Investment made into companies with the intention to generate a positive, measurable social
Impact Investing and environmental impact alongside a financial return. The report draws the definition
introduced by GIIN.
All supply-side stakeholders that channel capital to social enterprises and develop the impact
Investing in Impact investing industry. It includes both impact investors and mainstream investors.
Specific sectors and/or missions targeted by enterprises who contribute to the pursuit of
Impact Areas
creating social and environmental impact. The report draws impact boundaries using adapted
(or Impact Premises)
IRIS impact taxonomy.
Impact Deal Investment made into a social enterprise. See SE1 and SE2 below.
Explicit motivation of an organization to create social and/or environmental impact. The

Impact Intention intention is usually reflected in the organization’s mission, strategy, and efforts to measure
impact.
Pipeline The availability of investible enterprises.
Funding availability The availability of funds to be invested in enterprises.
Investor (Supply-side) Category
Investors with clearly defined impact mission and measurement, alongside generating a
Impact Investors financial return. Some impact investors would be willing to trade off financial return for social
impact (concessionary) or require a market return from their portfolios (non-concessionary).
Investors not defining themselves as impact investors, such as, private equity (PE) and/or
Mainstream Investor in
venture capital (VC) firms who are actively investing in enterprises within impact areas. They do
Impact Exposure Premises
not yet have a clearly stated impact intention.
vi
Enterprise (Demand-side) Category
An organization with a mission to address social problems in society and/or create positive
impact for the welfare of society and the environment; this organization operates commercially
Social enterprise
to create profit (of which a significant amount will be reinvested to pursue stated social
mission).
Social Enterprise 1 “Social Enterprise 1” (SE 1) is a unique coding in this report that shows that the social enterprise
(SE 1) has received funding from at least one Impact Investor.
“Social Enterprise 2” (SE2) did not receive funding from Impact Investors but received
Social Enterprise 2 funding from mainstream investors. These enterprises are operating within Impact Areas,
(SE 2) and have a high level of confidence that these enterprises have an impact intention and
level of impact measurement.
Enterprise in A for-profit organization operating within impact areas (see below) without any explicit impact
impact areas mission and measurement.
Investor Location
Used interchangeably with “foreign fund manager” and “foreign fund”. It refers to investors
where the decision making is made overseas. Foreign investors are divided into foreign inves-
Foreign investor
tors with local representatives (or “local presence”, see below) and foreign investors with no
local representatives.
Used interchangeably with “local fund manager” and “local fund”. It refers to investors where
Local investor
the decision-making is made inside Indonesia, unless otherwise stated.
Local presence refers to any investors who have local representatives in Indonesia. They hire
Local presence team members to work in Indonesia. However, it does not always mean that the decision-mak-
ing is made in the country.
Investment Strategy
Blended finance is the use of catalytic capital (such as debt, equity, or guarantees) from public
Blended Finance
or philanthropic sources to increase private sector investment in sustainable development.
A situation where the social enterprise receives funding from both impact and mainstream
investors. However, the investment from these sources does not necessarily need to be
Co-investment
deployed at the same time. The mainstream investment can come before or after the impact
deal.
Investment with a specific intention to deliver value to women, whether as a direct recipient of
Gender Lens Investing
the capital (women entrepreneurs), or as beneficiaries alongside the recipient enterprise’s
(GLI)
value chain.
Enterprise Stage
The stage of the enterprise where an entrepreneur is focusing on building or testing the
Pre-seed stage
solution. When they raise capital, the typical amount is USD 5,000 - 50,000.
The stage of the enterprise where an entrepreneur needs to prove the concept and acquire
their first clients. The entrepreneur may need capital for product development and market
Seed stage
research as well as building a management team and developing a business plan. The typical
fundraising ask is USD 50,000 - 500,000.
The stage of the enterprise where the business plan and the product is launched in the market
Growth stage and is validated by the customers. Now, they aim to acquire more clients and/or increase
market share. The typical fundraising ask is USD 500,000 – 1,000,000.
The stage of the enterprise where an entrepreneur aims to lead the market by expanding their
Expansion stage operations. Sometimes, they also aim to acquire new customer segments. The typical fundrais-
ing ask is above USD 1,000,000.
vii
List of Abbreviations
Abbreviation Meaning
ANGIN Angel Investment Network Indonesia
AVPN Asian Venture Philanthropy Network
DFAT The Department of Foreign Affairs and Trade (of Australia)
DFI Development Finance Institution
EIA Enterprise in impact areas
FC Financial capital
GIIN Global Impact Investing Network
GLI Gender Lens Investing or Gender Lens Investment
GP General Partner
IC Intellectual capital
II Impact investor
IRIS Impact Reporting and Investment Standards
IRR Internal rate of return
LP Limited Partner
MIE Mainstream investor in impact premises
MSME Micro, small & medium enterprise
OJK Otoritas Jasa Keuangan (Indonesian Financial Services Authority)
SC Social capital
SDGs Sustainable Development Goals
SE 1 Social Enterprise 1
SE 2 Social Enterprise 2
YCAB Yayasan Cinta Anak Bangsa
viii
Foreword
In the early days of ANGIN, back in 2013, impact investment was still seen as a niche industry, quite isolated
from the crowd of other venture capitalists and fast growing entrepreneurs enabled by emerging technolo-
gies. Impact investment and social entrepreneurship were still perceived as a new approach to philanthropy
as if the first part of their status: “Impact and Social” was the dominant connotation.
Fuel by impact and market opportunities that become obvious to various stakeholders, more and more lead-
ers and the financial industry looked to funnel financial capital into investments that have a social and environ-
mental impact while generating promising financial return.
It is encouraging now to see how the impact investment agenda has left the small circle of change makers to
spread to more mainstream circles. Whatever defined as “impact investment”, the integration of “beyond
financial return” analysis became a “must strategy” integrated by a large portion of the investors. It is not
surprising now to see venture capitalists joining impact investment panel discussion or recruiting ESG special-
ists.
The organizations and individuals who are going to make the future of impact investment in Indonesia are the
ones who fully understand the impact needs and turn their intentions into actions. Diverse stakeholders have
their role to play in the development of impact investment in Indonesia, and our work also captures the
dynamics of other key players beyond the impact investors and the entrepreneurs.
We believe this report will be a strong source of information for anyone interested in supporting entrepre-
neurs striving to create a long lasting impact for the country. It is a continuous effort of ANGIN to bring more
transparency, insider insights and field experience to peer change makers.
ANGIN Team
September 2020
ix
General Introduction
A) Common perception and new paradigm of impact investing
Figure A. Common perception
Impact focus Financial focus

(Social/ Environmental goal) (Profit goal)
Philanthropist Mainstream investor
Often
NGO Mainstream enterprise
misunderstood to
be completely
Impact exclusive Profit
There is a common perception that social/environmental impact goals and commercial/profit-seeking goals
are either mutually exclusive (see Figure A) or always contradict each other. In other words, the perception
was that:
Mainstream investors solely pursue financial goals (i.e. monetary return on investment) with a
capitalist mentality and only Philanthropists exclusively aim for social and environmental goals.
Mainstream enterprises exclusively pursue financial/commercial goals and only NGO (Non-profit
organizations) aim to deliver social / environmental goals.
Figure B. A new paradigm
Impact focus Balanced focus Financial focus

(Social/ Environmental goal) (Impact + Profit) (Profit goal)
Philanthropist Impact investor Mainstream investor
NGO Social Enterprise Mainstream enterprise
Impact Impact + Profit Profit
However, a new paradigm (Figure B) has emerged at the nexus of traditional capitalist and non-profit models.
It is a hybrid model that seeks to balance both commercial and social/environmental goals, considering both
goals are complementary and inclusive. The concepts of Impact Investor and Social Enterprise emerged in
Indonesia in the late 1990s.
Some characteristics of impact intention, financial return expectation, and impact measurement illumi-
nate how the industry stakeholders in this field differ.
x
Figure C. Supply-side stakeholders operating within impact areas
Characteristics Philanthropy Impact investor (II) Mainstream investor (MI)
Clearly stated impact intention Yes Yes No
Both impact and profit are

Priority: prioritised
Impact only Profit only
Impact and/or Profit (Concessionary / non-conces-
sionary)
Impact Measurement Yes Yes No
Financial Return Expectation No (Negative to 0%) Yes (0% and up) Yes (8% and up)
Figure D. Demand-side stakeholders operating within impact areas
Mainstream enterprises
Characteristics NGO/Non-profit (NP) Social enterprises (SE)
(ME)
Impact Investor or/and

Typical source of funding Philanthropist Mainstream Investor
Mainstream Investor
Clearly stated impact intention Yes Yes No or not stated
Priority:
Impact and/or Profit Impact only Both are prioritised Profit only
Impact measurement Yes Yes No
Financial return expectation No Yes Yes
B) Bringing new concepts: Enterprise in Impact Areas and

Mainstream Investors with Impact Exposure
Another common perception was to consider that only impact investors invest in social enterprises, and
only social enterprises are delivering “impact” as a result of their business operation. However, in practice,
we observe in Indonesia that:
Not only impact investors are investing in social enterprises. We see other investors playing an
important role in financing social enterprises, and therefore, in the achievement of the UN Sustain-
able Development Goals (SDGs) in Indonesia. We identified an increased number of social enter-
prise being funded by mainstream investors and mainstream investors investing in Impact Areas1 .
Not only social enterprises deliver “impact” (i.e. achieve positive social and environmental
impact through the business). “Impact” can be a vague concept and while social enterprises inten-
tionally state that they are pursuing “impact” and have the duty to measure it, Mainstream Enter-
prise working in Impact Areas also contribute to achieving “impact” without stating it openly or with
a capacity to measure it.
1
The report draws impact boundaries using adapted IRIS impact taxonomy. (Appendix A, Impact Areas).
xi
Figure E. Extended scope of impact investment
impact focus Balanced focus Financial focus

(Social/Env goal) (Impact + Profit) (Profit goal)
Philanthropist Impact investor Mainstream investor

MIE
NGO Social Enterprise Mainstream enterprise
EI
Impact Impact + Profit Profit
Therefore, in this report we are introducing two new concepts that allow a more nuanced understanding and
picture of the market in Indonesia:
“Enterprise in Impact Areas” (EI): A mainstream enterprise who is not defined as a social enter-
prise (or perceived as so) but which is operating within impact areas.
“Mainstream Investor with Impact Exposure” (MIE): Mainstream Investor who is not defined as an
impact investor (or perceived as so) but that is actively investing in social enterprises and in Enter-
prise in Impact Areas.
Figure F presents a more detailed characteristics of the two new concepts
Figure F. New stakeholders operating within impact areas
Mainstream Investor with Enterprises in

Characteristics
Impact Exposure (MIE) Impact Areas (EI)
Clearly stated impact intention No No
Priority: Profit first Profit first

Impact and/or Profit (Impact secondary) (Impact secondary)
Impact measurement No No
Financial return expectation Yes (8% and up) Yes
As a desire to identify clearly our target market for this research, we set certain boundaries as below:
“Impact Investor” (II): We only consider investors structured as funds or holding companies. We
did not include other investors such as angel investors, banks, public investors.
“Social enterprise” (SE): As we could not verify the key characteristics that would defined a social
enterprise, we made a distinction between categories of social enterprises as follows:
“Social Enterprises 1” (SE1) are the ones who received funding at least from one Impact
Investor
“Social Enterprises 2” (SE2) did not receive funding from Impact Investors but received
funding from mainstream investors. These enterprises are operating within Impact Areas,
and have a high level of confidence that these enterprises have an impact intention and
level of impact measurement.
It is important to note that this report presents data gathered on social enterprises type SE1 (i.e those that
have received funding from - but not exclusively - impact investors). Companies identified as type SE2 and
EI who are operating in impact areas but have only received funding from mainstream investors over the past
10 years are not the focus of this report.
xii
2020
Investing in Impact in
Indonesia
Part 1
Supply-side: A closer look at the
investors funding impact entrepreneurs
Part 1: Supply-side: A closer look at the investors funding impact entrepreneurs Investing in Impact in Indonesia - 2020
1.1 Introduction
As mentioned in the introduction, impact investors and philanthropists are not the only stakeholders provid-
ing financial capital to social enterprises and impact areas in Indonesia. Over the last five years, we have seen
mainstream investors playing a critical role in channelling capital to social enterprises and developing the
impact investing industry. Together, all these stakeholders are included under the umbrella of “Investing in
Impact”. In this section we summarize their activities, characteristics and operations in Indonesia to identify
how the industry is likely to develop in the future.
1.2 Timeline: Evolution of the investment activity in

Indonesia
The impact investment scene in Indonesia has developed significantly since 2013. Overall, we can see that
both impact investors and mainstream investors have been steadily increasing their investment activities in
Indonesia during this period, as the number of social enterprises in Indonesia increases and these enterpris-
es mature to absorb capital.2 The evolution of the industry has been categorized into three phases (Figure 1.1).
Figure 1.1 Timeline-related data and indicators
AMOUNT OF CAPITAL DEPLOYED

(IN USD MILLION) 160
147
92
BY IMPACT INVESTORS
62
BY MAINSTREAM INVESTORS
WITH IMPACT EXPOSURE
(MIE)
58 2
EMERGENCE PHASE PARTICIPATION PHASE ADVANCING PHASE

( 2013-2015 ) ( 2016-2018 ) ( 2019-2020 )
Social enterprises funded

by Impact Investors 17 35 31
(SE1)
Social enterprises (SE1)

funded by 1 17 19
Mainstream investors
New entrant
Impact Investors 16 17 8
Key observations First generation of Impact inves- Impact investors and New more sophisticated fund
tors started to make investments mainstream investors activities structures and strategies:
started to “merge”: looking at innovative instruments,
Large portion of the impact
similar dealflow (e.g. tech localization development,
investors still in observation
solution in agriculture, fintech thematic focus
mode
etc), and co-investing
Impact and mainstream More effort to leverage local
investors worked in silo Some first generation investor capital
exited Indonesia
Funds from development
Second wave of impact inves-
agencies (typically grant
tors usually backed by multilat-
scheme) are now exploring
eral organisations and develop-
impact investment (e.g. ADB
ment agencies
Indonesia)
Mainstream investors become
more exposed to “impact”, e.g.
initiated new impact arms or
funds (e.g. Gayo Capital by
Ideosource team), impact
branding (e.g. Mandiri Capital,
Alpha JWC)
2
According to GIIN research, between 2007 and 2012 only three impact investment deals were made. Source: "THE LANDSCAPE FOR IMPACT INVESTING IN ... - The GIIN."
https://thegiin.org/assets/Indonesia_GIIN_SEAL_report_webfile.pdf. Accessed 31 Jul. 2020.
2
1.3 Indonesia’s Impact Investment Landscape in 2020

Below are the summary of key metrics related to the supply side of the impact investing industry in Indonesia.
The data is based on ANGIN’s research and estimate.
Figure 1.2 Overview of Impact Investors and Mainstream Investors with Impact Exposure
17%
25% STILL
STILL
PROSPECTING
21%
> 1 INVESTMENT
PROSPECTING
34%
> 1 INVESTMENT
66IMPACT
107
MAINSTREAM INVESTORS
INVESTORS WITH IMPACT
EXPOSURE
41% 63%
1 INVESTMENT
1 INVESTMENT
$ $
FOREIGN FUND 93% FOREIGN FUND 70%
HAVE DEDICATED LOCAL HAVE DEDICATED LOCAL

42% 69%
REPRESENTATIVES REPRESENTATIVES
Figure 1.3 Social Enterprises (SE1) funded per year
Impact Investor Mainstream Investor
30
20
10
0
2013 2014 2015 2016 2017 2018 2019 2020
83 Invested by
Impact Investors 37 Co-Invested by
Mainstream Investors
USD 267 MILLION USD 256 MILLION

CAPITAL DEPLOYED CAPITAL DEPLOYED
USD 3 MILLION USD 2.5 MILLION

MEDIAN TICKET SIZE MEDIAN TICKET SIZE
Figure 1.4 Number of investment (in SE1) by investment ticket size
USD 101k - USD 501k - USD 1 mil -

Number of Investment ≤ USD 100k >USD 5mil Total
USD 500k USD 1 mil USD 5 mil
By Impact Investors 5 27 17 23 11 83
By Mainstream Investors 2 3 12 17 3 37
Number of deals refer to co-investment by multiple investors participating in the same round
3
Figure 1.5 Social enterprises funded and capital deployed (SE1)
IMPACT INVESTOR
Total capital TECH MODEL
Type of Industry Number of deployed
investment (USD million)
22%
Tech-enabled
Education 2 11
Energy 1 20 GENDER FRAME

Financial services 22 71
19%
Fishery 7 5 Women-led or -owned
Food & agribusiness 21 13
Forestry & land 5 114
Healthcare 2 16
Sector agnostic 14 13
Waste 5 4
Water, sanitation & hygiene 4 1
83 267
MAINSTREAM INVESTOR WITH IMPACT EXPOSURE

Total capital TECH MODEL
Type of Industry Number of deployed
investment (USD million)
89%
Tech-enabled
Education 1 70
Energy - - GENDER FRAME

Financial services 15 74 21%
Fishery 3 4 Women-led or -owned
Food & agribusiness 1 0.85
Forestry & land - -
Healthcare 5 43
Sector agnostic 12 64
Waste - -
Water, sanitation & hygiene - -
37 256
4
1.4 Key insights

The key insights below represent the analysis based on our unique data collected over the last 7 years, the
interviews with experts and in-depth targeted desktop research. For each insight we are including an educa-
tional background to include the insight into a framework and context. We then exposed the key data we will
be using to support our reflection. Lately, we provide recommendations for action.
Figure 1.6 Summary of key insights
Concessionary vs. 11% are concessionary and 89% are non concessionary
non-concessionary Misaligned priorities of impact investors and entrepreneurs
investment mindset Impact Investors desire to attract private capital in an emerging impact ecosystem
Typical investment team member and structure

Team profile in Lack of a complete team structure
impact investment Gender imbalance in the impact investment team
Potential issues with limited local talents
The influence of development institutions and public funding

Gender lens investment (GLI)
Emerging interest in GLI from the mainstream investors
on the rise
Current GLI implementations are narrow in scope
Blended finance as gap-bridger

The development of
Remaining barrier of required return
blended finance
Lack of information on blended finance in the market
Different types of localization development

Localization of
Positive sentiment towards local entrepreneurs
impact investing
The national effort
Focus on impact themes is driven by the demand-side of the investment

Focus on certain instruments comes from factors on both supply-side and demand-side
Investor thematic focus
The lack of focus in Indonesia as a region represents the lack of local capital on the supply
side and the nacency of Indonesia's social entrepreneurship
Investment funds are facing challenges in all stages of its lifecycle, not only during capital
Investors facing disbursement
new challenges
Foreign funds and local funds are facing different challenges
Difference between capital owner composition in impact investing and mainstream

Capital owners behind the investing
impact investors
Expected change in capital owners participation in the future
5
1.4.1 Concessionary vs. non-concessionary investment mindset
Introduction
Impact investments are investments made into enterprises (and funds) with the intention to generate social
and environmental impact alongside an expected financial return. This financial return expectation is typical-
ly defined by the fund managers and represents the financial return that the investors into these funds (called
usually Limited Partners) will receive from their investments. Impact investing can have a broad range of
return expectations across the risk-return spectrum.
A common framework to map impact investors is to divide them into two categories according to their return
expectations:
Concessionary investments recognize that a social enterprise investment is less likely to deliver the
same financial result (in a similar time frame) as a mainstream enterprise. This trade-off is accepted
on a risk-adjusted basis. The investor justifies a lower-than-market return so long as there is a greater
“impact” return.
Non-concessionary investments do not hold space for a trade-off between financial return and
impact. The social enterprise investment should be as commercially viable as a mainstream enter-
prise. The investor is not willing to accept a lower-than-market financial return
Please refer below for information on market financial return that we utilized as reference to categorize inves-
tors as either concessionary or non-concessionary. Our reference point is based on our general observation
of the average IRR (for equity investment) and average interest rate (for debt investment) in private invest-
ment deals that are being conducted in Indonesia. The tipping point for USD loan is at 6% of interest (with the
average rate being 6-8%), IDR loan is at 9% of interest (with the average being 9-12%), equity investment is at
23% of IRR (with the average rate being 23-25%).
Figure 1.7 Expected market rate of financial return based on instrument
Loan Interest (USD) Debt USD
Loan Interest (IDR) Debt IDR
Equity IRR Equity
6% 9% 23%
CONCESSIONARY NON-CONCESSIONARY REFERENCE POINT (TYPE)
6
From our data

Figure 1.8 Distribution of concessionary compared to non-concessionary investors
89% 11%
CONCESSIONARY
NON-CONCESSIONARY
USD 259 MILLION

CAPITAL DEPLOYED
(2013-2020)
66 IMPACT
USD 8 MILLION
CAPITAL DEPLOYED
(2013-2020)
INVESTORS
40% 80%
Deals in tech-enabled Deals in tech-enabled
business model business model
Reflections
General observations
Based on our observations of 66 Impact Investors, 11% are concessionary and 89% are non concessionary.
This is relatively aligned to the global standard according to GIIN survey report (2018) on 106 impact inves-
tors, where 81% were non-concessionary, targeting the market rate for their required financial return3.
Misaligned priorities of impact investors and entrepreneurs

Most social entrepreneurs surveyed perceive impact investors as concessionary, both in terms of return
expectations and how they conduct their operations (more understanding due diligence, softer negotiation
and nicer terms offered). There is a misalignment between that belief and what is the expectation of the
impact investors. Entrepreneurs who have direct involvement with impact investors in Indonesia report that
investors prioritize return on investment over impact and have onerous due diligence with very small room to
bargain.
Impact Investors desire to attract private capital in an emerging impact ecosystem

Impact investors have grown their operation in Indonesia since 2013, however, there is still a very basic
understanding of impact investment terminology among potential private capital owners such as families,
individuals, corporates. These potential financial backers (Limited Partner or LP) also tend to perceive impact
investing as less financially attractive than mainstream investing who are also competing for their capital. The
non-concessionary nature of most fund managers is driven by their desire to attract funding from LP/capital
owners who are non-concessionary and typically view impact investing as not commercially viable. In order
to secure these investments, they need to produce a competitive financial return and thus prefer to be
non-concessionary.
Recommendations
Educating capital owners that impact investment is not equal to lower financial return.
To help more capital flow from mainstream investment to the impact investing field, capital
owners need to be educated that impact investment fund managers can produce attractive
financial returns, in addition to creating long-lasting impact in the society. This could reduce
the gap of capital available between mainstream investment and impact investing.
Develop dialogue between stakeholders (entrepreneurs and private capital owners) and
impact investors to establish that impact investing does not always translate to conces-
sion. Resolving the return expectation mismatch is critical to ensuring a functioning impact
investment market.
3
“Annual Impact Investor Survey 2018 - The GIIN” https://thegiin.org/assets/2018_GIIN_Annual_Impact_Investor_Survey_webfile.pdf. Accessed 8 July 2020.
7
1.4.2 Team profile in impact investment
Introduction
A typical institutional investment team (Impact Investor, PE, and VC) is usually structured around three levels
of seniority, namely “Associate / analyst”, “Investment Manager”, and “Partner”. The level of professional and
investment experience, along with the level of decision making within the fund usually determine the posi-
tion. Please refer to below for further information on their general roles and responsibilities.
Figure 1.9 Team profile roles and responsibilities
Years of
Rank Key responsibilities (example)
investment experience
Deal scouting/sourcing
Associate Meeting entrepreneurs for initial meeting
0-4 year(s) Market analysis
/analyst
Assisting due diligence
Portfolio reporting and monitoring
Middle management Investment team (analyst/associate) management

(also called vice presidents, Secondary meeting with entrepreneurs
4-10 years
principals, or investment Deal execution
managers) Portfolio support (strategy, follow on investments)
Lead and execute fund strategy

Partner Investment committee decision
(also called Managing 10-15 years Board position holder of portfolio companies
Director, CEO) Fundraising
LP management
We reviewed the team composition of 14 impact investors that are currently active in Indonesia, consider
Indonesia to be a “key market” and have local team presence. The profile of team members is summarized
in Figure 1.9.
8
From our data

Figure 1.10 Investment team profiles in selected impact investors in Indonesia
INVESTMENT TEAM PROFILE

Middle Analyst/
Partner Level Management Level Associate Level
WOMEN IN THE TEAM INDONESIAN NATIONALITY
10% 60%
40% 70%
33% 100%
PROFESSIONAL BACKGROUND PROFESSIONAL BACKGROUND

FINANCIAL SERVICES START-UP EXPERIENCE
50% 50%
70% 40%
67% 33%
EDUCATIONAL BACKGROUND EDUCATIONAL BACKGROUND

MASTER DEGREE EDUCATED OVERSEAS
70% 80%
90% 90%
50% 67%
INVESTMENT TEAM COMPOSITION
SINGLE RANK
9 Partner only : 2 fund managers

Middle management only : 5 fund managers
Analyst / Associate only : 2 fund managers
DOUBLE RANK
4 Partner + Middle management : 3 fund managers
Partner + Analyst / Associate : 1 fund manager
1 COMPLETE
Complete : 1 fund manager
*Number of employees reviewed: 10 partner level, 10 middle management level, and 6 analyst/associate level from 14 fund managers.
9
Reflections
Typical investment team member and structure in Indonesia

A typical investment team consists of highly- and foreign-educated Indonesian male, with finance, entrepre-
neurship and/or startup backgrounds. Further, the industry is currently facing an inverse pyramid situation,
where overall, there are more partner and middle management level employees compared to analyst/associ-
ate level employees.
Lack of a complete locally-based team structure

Out of 14 funds, nine employ only one type of rank of employee (e.g. partner(s) only, associate(s) only) and
only one fund has a complete team composition. These one-employee rank investors typically co-invest with
other larger investors and/or receive support from their global firm network and other intermediaries (e.g.
ANGIN, AVPN, accelerator programs) when sourcing and executing deals.
Gender imbalance in the impact investment team

The gender imbalance is obvious across all levels, with women occupying just 27% of all roles in impact
investors in Indonesia. Some funds have started setting women-specific investment mandates through
gender lens investment funds, and this may prompt greater involvement from women employees (from both
supply and demand-side). Industry training and talks about gender diversity and gender lens investing are
becoming more commonplace, as well as giving visibility to women employees and establishing peer groups
for women in VCs.
Potential issues with limited local talents

Foreigners tend to occupy the middle and upper level management of investment firms. This potential issue
also reflects nationwide trends across other industries. As highlighted by the World Bank (2019), Indonesia
continues to experience a lack of skilled human resources for managerial and other professional positions.4
Additionally, OJK (Indonesian Financial Services Authority) has historically tried to limit the number of expatri-
ate workers in the financial service industry in Indonesia (e.g. limiting positions in the banking industry
5
depending on the size of the institution). However, the majority of foreign-linked fund managers have set-up
representative offices, which do not fall under OJK jurisdiction. If fund managers do establish a proper invest-
ment fund structured under applicable OJK regulation in Indonesia, they may find it difficult to fill managerial
positions with local talent.
Recommendations
As the impact investing industry in Indonesia matures, we expect that most fund managers
will try to reverse the current inverse pyramid structure (most employees at the lowest layer
and least employees at the highest layer). Accordingly, in expectation of demand for impact
investing talents growing in the future and to help solve current talent-related issues in Indo-
nesia, we would recommend supply-side stakeholders to:
Provide career support to potential female leaders in the field, including female-exclusive
support programs such as training sessions and internship opportunities. Stakeholders can
also encourage fund managers to create programs that promote both the hiring and also
career progression of female employees within investment firms.
Help expand the locally-educated talent pool by improving relevant technical skills and
increasing their awareness of the industry through impact investing competitions, seminars
and on-the-job training; especially for students in top local universities.
4
"What is behind labor mobility costs? Evidence from Indonesia." World Bank Group
http://documents.worldbank.org/curated/en/266171569514810972/pdf/What-is-Behind-Labor-Mobility-Costs-Evidence-from-Indonesia.pdf. Accessed 20 Jul. 2020.
5
"SAL POJK 37 - TKA di perbankan.pdf."
https://www.ojk.go.id/id/kanal/perbankan/regulasi/peraturan-ojk/Documents/Pages/POJK-tentang-Pemanfaatan-Tenaga-Kerja-Asing-dan-Program-Alih-Pengetahuan-di-Sektor-Perbankan/ 10
SAL%20POJK%2037%20-%20TKA%20di%20perbankan.pdf. Accessed 20 Jul. 2020.
1.4.3 Gender lens investment on the rise
Introduction
There is an increasing effort in Indonesia to achieve women economic empowerment, where women can
have equal access to resources, quality work, and participation in decision-making. Gender Lens Investing is
one alternative to contribute to this effort.
Figure 1. 11 Gender lens investment conception and application
Common application of GLI Additional application of GLI
Choosing an Implement gender lens in Apply equality and diversity

Application investment lens the investment process within the fund
Women owned enterprises Dedicated sourcing partnership Investment team gender

Women led enterprises to increase proportion of women diversity
Enterprises positively entrepreneurs Women voices promoted in the
impacting women across Training on gender bias investment committees
Example
the value chain Integration of gender measure- Sexual harassment internal
Enterprises delivering ment scheme during screening policies
product/services to and due diligence
underserved women
Gender Lens Investing (GLI) is defined as “the integration of gender analysis into financial analysis in order to
6
make better investment decisions and get a better outcome”. This theme has been discussed globally and is
spearheaded in Indonesia by some development aid agencies, foundations, and DFIs such as: Investing in
Women (Australia’s Department of Foreign Affairs and Trade), Sasakawa Peace Foundation, and U.S. Interna-
tional Development Finance Corporation (DFC) (formerly known as Overseas Private Investment Corporation
/OPIC). However, the scope of GLI is viewed differently across investors. The common application is to define
specific investment opportunities such as focusing on women-led and women-owned businesses only, while
others include enterprises empowering women and/or improving women’s livelihood, whatever led by
women or males.
Beyond the type of enterprises targeted, additional applications of GLI are getting momentum in Indonesia
as funds are increasing their gender knowledge integrated into their investment process or because funds
themselves tried to apply more gender diversity within their own investment team.
It is important to note that not every investment involving women entrepreneurs and the women market is
GLI. GLI should be integrated into an investor’s impact intention and reflected across the investment dimen-
sions including sourcing capital (through investors), processing capital (investment processing) and to
deploying capital (through entrepreneurs). GLI can be made explicit in either the core mission or the invest-
ment strategy.
From our data

Figure 1.12 Gender lens investment deals by impact investors
SECTOR
78% 22%
TOTAL INVESTMENTS 11%
GENDER LENS INVESTMENT
Food and Agribusiness Financial Services
BY (GLI) DEALS TECH MODEL GLI SCOPE
IMPACT INVESTORS
22% 89%
Invested by
7 Impact
Investors Tech-enabled Women-led or -owned
business
100% backed by
public capital
owners
6
Verhart, N. (2018) ‘Gender lens impact investing:a catalyst for change in commodity value chains’
http://www.common-fund.org/wp-content/uploads/2019/07/CFCAR-2018_Gender-lens-impact-investing.pdf
11
Reflections
The drive of development institutions

Current Impact Investor GLI activities in Indonesia are highly driven by development institutions who act as
the “LPs”. DFAT and USAID have been leading the contribution, backing respectively 56% and 33% GLI
investments done by impact investors. Since 2016, DFAT has been one of the key market builders in Indone-
sia through its “Investing in Women” program and has been supporting several foreign impact investors -
namely C4D Partners, Patamar Capital, Root Capital, and SEAF - to implement GLI.
This push from development institutions affects how the GLI space is shaped in Indonesia. The scope of
current GLI deals by impact investors reflects the agenda and definitions of the development institutions such
as focusing on women-led businesses (89% of GLI deals), or supporting offline enterprises (78%) operating in
the food and agribusiness sector (78%) where women represent a greater share of business leaders.
Emerging interest in GLI from the mainstream investors

Since 2019, there has been a global inflow of GLI capital in Asia amounting to USD 160 million of commit-
7
ments (not exclusive to Indonesia) from both impact and mainstream investors. There is also a new genera-
tion of GLI funds that are raised from the private sector, unlike the previous GLI funds that were fully backed
by development institutions. The emerging interest is coming from mainstream investors (in addition to
impact investors) who view GLI not only as an impact opportunity but also as strong commercial opportunity
yielding a higher return perspective, Although impact investors backed by development institutions still
focus on women-led businesses, mainstream investors in Indonesia interpret GLI in broader terms - investing
8
in enterprises that provide solutions to benefit women and empower women in the value chain.
Current GLI implementation are narrow in scope

GLI is often used as a filter during the pre-investment stage when investors select which entrepreneurs they
will deploy capital to. However, there are also other dimensions of GLI implementation, including implications
for where funds are sourced from (e.g. increasing women participation as LPs, prioritizing LPs with women in
leadership or decision makers roles) and processing capital (e.g. structuring deals to benefit women entre-
preneurs). The ongoing heavy focus on the “pre-investment stage” risks creating an environment where
women are tokenized or hired for purely symbolic reasons in order to attract investment and/or improve a
brand. This is known as ‘impact washing’ - when a fund labels traditional practices or investments as impact
investing to attempt to benefit from a particular impact trend - and it may hinder and filter out the real solu-
tions for women.
Recommendations
Nurture the GLI intention. The support for women entrepreneurs provided by both impact
investors and mainstream investors is growing, although most of them are not doing it inten-
tionally (gender-aware but not core GLI). Thus, we can help increase understanding around
GLI among investors and capital owners. The current market views GLI not only as an
“impact” thesis but also a “smart” effort to seize the market opportunity.
Implement GLI in capital sourcing and processing. GLI should be applied to the whole
investment process (not only during the deal stage). Impact investors need to do more to
recruit and retain female talent at all levels, especially at senior leadership levels. Investors
such as SEAF and Patamar have developed good practices that could be replicated - such as
a proprietary scorecard and building diversity in their investment team.
7
Based on interview and desk research (Appendix: Table “Commitment on GLI”)
8 Example of expanding gender lens deals: Teja Ventures investing in Klikdaily (a groceries e-commerce startup founded by men) and Shox (a fashion startup leveraging artificial intelligence
founded by men) and Gobi Ventures investing in Sorabel (a women fashion e-commerce founded by men) and Orami (a mother & baby marketplace founded by men).
12
1.4.4 The development of blended finance
Introduction
Blended Finance started to get momentum in Indonesia in the “Participating Phase”, pushed by organizations
such as the UNDP, ADB or DFAT, as a way to mix their public capital with the private sector capital. This new
structured approach aims to have organizations with different objectives to invest alongside9
each other while
achieving their own objectives (whether financial return, social impact, or a blend of both). Blended finance is
seen as a powerful tool to attract private sector capital that can help bridge the funding gap in realising the
SDGs, especially in low and middle income countries.
This section looks in detail at the data gathered in the research database (see Methodology) on the differenc-
es between conventional and blended-finance investments in social enterprises according to four dimen-
sions: impact area, technology enablement, gender-frame and location (Figure 1.13).
From our data

Figure 1.13 Blended finance and conventional investment by selected categories
5% 12% 18% 28%

SECTOR FINANCIAL FINANCIAL
OTHER
AGNOSTIC SERVICES SERVICES
21%
FORESTRY &
LAND
20 15%
FISHERY
19%
SECTOR
63
CONVENTIONAL
BLENDED
FINANCE DEALS
AGNOSTIC DEALS
BY IMPACT
7%
INVESTORS FISHERY
BY IMPACT
INVESTORS
3% 25%
47%
FOOD &
FORESTRY &
LAND FOOD &
AGRIBUSINESS AGRIBUSINESS
15%
tech-enabled business
53%
47%
women-led business
13%
women-led business
58%
business headquartered
in Jakarta
64%
in Jakarta
9
“Blended Finance - Convergence” https://www.convergence.finance/blended-finance. Accessed 8 July 2020
13
Reflections
Blended finance as gap-bridger

Our findings reinforce the value of blended finance as a “gap-bridger”, deploying capital in areas that are
typically less popular with non-blended finance (“conventional”) impact investment.
Most blended finance investment deals (77%) in Indonesia are made with social enterprises in the natural
resource sector (fishery, agribusiness, forestry) and 47% are with women-led businesses, as compared to
“conventional” impact investments that tend to focus on financial services, and non-women-led businesses.
The explanation for this is two fold. Firstly, six out of the 11 blended finance funds we identified have a
gender-lens investment mandate and women-led enterprises tend to operate in the natural resources sector.
Secondly, some of the blended funds identified also have a specific environmental mandate.
Just 15% of enterprises receiving blended finance are tech-enabled. Blended finance investment teams tend
to select sectors with less complex business models, to compensate for the fact that blended investment
schemes are more complex to manage. In addition, enterprises operating in the natural resources sector
tend to be less tech-enabled.
Remaining barrier of required return

Currently the way that blended finance is structured helps remove some barriers for the entrepreneur to
access funding. However, based on our interviews with fund managers (who tend to be non-concessionary)
this does not always translate to a lower rate of return requirement to the portfolio company. As a result, com-
panies that are already relatively more financially stable have a much higher chance to receive blended-fi-
nance funding, leaving smaller, less stable enterprises unfunded.
Lack of information on blended finance in the market

Lastly, based on our observation, the impact investment market stakeholders in Indonesia do not have
enough information about blended finance. Most information sessions are conducted by third parties who
are still new to the practice, rather than the foreign aid institutions who are directly involved
Recommendations
Private capital owners and impact investors should consider blended finance schemes as
one of the main methods to diversify investments outside of the currently popular sector
(e.g. financial inclusion sector or tech-enabled sector). Collaborating with government
entities and/or other foreign aid institutions in a blended finance scheme can be a more
certain way of channeling funds to currently less-popular impact areas such as gender equal-
ity or climate change. This can also be done indirectly by providing capital to fund managers
who have set-up blended finance funds targeting non-financial sectors.
Private capital owners and impact investors can become a concessionary capital that may
direct funding to enterprises and sectors that are less stellar (but still a viable investment)
in terms of financial performance. By acting as concessionary private capital partners in
blended finance schemes, private capital owners may create investment schemes that
require less stringent financial return requirements, thus giving more capital access to the
previously unfunded smaller enterprises.
Educating the market about blended finance. In order to improve market players' knowl-
edge and hopefully increase participation in the field, capital owners and intermediaries can
plan educational events (such as panel discussion or seminar) with foreign aid institutions
that are currently backing such schemes in Indonesia.
14
1.4.5 Mainstream investors: helpful allies in filling the gap and building the
capital continuum
Introduction
10
According to UNCTAD report, developing economies are facing significant funding gaps in fulfilling Sustain-
able Development Goals. Total capital needed for basic infrastructure, climate change mitigation, food securi-
ty, and health & education in developing regions is estimated to be from USD 3 trillion to USD 4.5 trillion per
year. On the other hand, with the recent level of c. USD 1.5 trillion investment in SDG-related sectors (both
public and private), it is estimated that there is still an annual funding shortfall of c. USD 2.5 trillion in the same
sectors.
Although growing quickly, the impact investing industry alone with global market size of USD 502 billion per
11
GIIN data in 2019, is having difficulty in filling in this gap. The private financial investment market (such as
private equity and venture capital), which has a good affinity with the impact investing industry due to the
majority of impact investments being private investments, can be a helpful supporter in bridging this gap,
12
especially with USD 6.5 trillion AUM and USD 2.3 trillion of dry powder available globally in 2019. The addi-
tional stream of capital brought by mainstream investors hopefully can also bring a more uniform spread of
capital to an investment field that currently tends to favor certain archetypes of enterprises (refer to part 2.3.2
of this report).
This section looks in detail at the data gathered in our research (Figure 1.14) on the different investment
patterns of mainstream investors (MIE) and impact investors in social enterprises, according to four dimen-
sions: impact area, technology enablement, gender-frame and location.
From our data

Figure 1.14 Social enterprises invested in by impact investors and mainstream investors
16% 16%
OTHERS OTHER
27%
FINANCIAL
17%
SECTOR
71
SOCIAL ENTERPRISES
SERVICES
32%
SECTOR
20
SOCIAL ENTERPRISES
41%
FINANCIAL
AGNOSTIC INVESTED AGNOSTIC INVESTED SERVICES
BY
IMPACT INVESTORS
9%
FISHERY
BY
MAINSTREAM
INVESTORS
6%
FORESTRY &
25% 3% 8%
LAND FOOD & FISHERY
FOOD &
AGRIBUSINESS
AGRIBUSINESS
23% 38%
96% 50%
Enterprise stage
Enterprise stage
Seed Seed
31%
Series A
21%
Series A
19%
women-led business
14%
Series B 22%
women-led business
_
Series B
14% 2%
49%
in Jakarta
Series C
3%
Mature &
91%
in Jakarta
Series C
20%
Mature &
others others
Before Impact Investors At the same time as Impact Investors After Impact Investors
Investment sequence of 82% 5% 14%

Mainstream Investors (18 enterprises) (1 enterprises) (3 enterprises)
Notes: “Invested by MIE” means enterprises that received investment from both MIE and II, while “Invested by II” means enterprises that only received investment from II.
10
"Developing countries face USD2.5 trillion annual ... - UNCTAD." 24 Jun. 2014, https://unctad.org/en/pages/PressRelease.aspx?OriginalVersionID=194. Accessed 21 Jul. 2020.
11
"Sizing the Impact Investing Market | The GIIN." 1 Apr. 2019, https://thegiin.org/research/publication/impinv-market-size. Accessed 21 Jul. 2020.
12
"McKinsey's Private Markets Annual Review | McKinsey." 19 Feb. 2020, 15
https://www.mckinsey.com/industries/private-equity-and-principal-investors/our-insights/mckinseys-private-markets-annual-review. Accessed 21 Jul. 2020.
Reflections
Sector focus of mainstream investors

Our findings indicate that more than a third of social enterprises have received funding from mainstream
investors, demonstrating their increasingly active role in the industry.
Mainstream investors in Indonesia have shown a preference for tech-enabled enterprises (96%) in
the financial services industry (41%) that are headquartered in Jakarta (91%). The explanation for this
is two fold. Firstly, there are still enormous opportunities for Indonesia’s financial services sector
13
given that around 44% 14of the adult population is unbanked (2018) and the household debt to GDP
ratio remains low at 17%. Secondly, in a country with one of the largest populations in the world, main-
stream investors focus on tech-enabled enterprises that can address large markets and scale quick-
15 16
ly. With 95.2 million of internet users and 81.9 million of smartphone users, tech-enabled enterprises
in Indonesia should have no problem reaching the mass-market.
As a consequence of mainstream investors’ preference for financial services and tech-enabled

enterprises, their investments have been almost entirely focused in Jakarta. The infrastructure and
resources available in the capital city allow enterprises to flourish and develop more sophisticated
technology.
Improved balance on continuum of capital

Through our data, we have observed that Impact Investors are focusing on early stage enterprises (71% of
enterprises invested are seed and series A enterprises) and also mature enterprises (26%). This is likely due
to the mandate of most impact investors that require them to either support social enterprises that have just
started their business or invest in matured enterprises with proven business solutions that can provide both
valuable financial and impact return.
However, this often results in enterprises that have passed their early development stage but yet to fully
mature (i.e. series B and series C enterprises) to lack funding from impact investors. Mainstream investors'
involvement in impact premises, on the other hand, has helped fill in this void (with a total of 28% enterprises
funded in series B and C stage) . As majority of MIEs are venture capital funds that typically invest in all stages
of enterprises (except for mature and later), they have helped bring investment into ventures that have devel-
oped their product offerings but needed more capital support in growing their operation and developing their
market, through series B and series C funding.
Furthermore, contrary to common perception of MIE investing mostly in more developed social ventures only
after II putting initial seed investment, we found that for enterprises that received funding from both MIE and
II, MIE tends to invest before II (82% of the cases). If ventures can attest to a viable and profitable business
model that can withstand the rigorous selection process of MIE investment team, then MIEs, with their
non-concessionary nature and larger amount of available capital, are typically willing to invest without having
to wait for investment from other investors.
Below are the examples of social enterprises that received funding from both MIE and II in different sequenc-
es:
MIE investing before II (Example: Amartha)
In 2017, PT Mandiri Capital Indonesia (MIE), led a round of investment with other mainstream inves-
tors and invested up to USD 5 million in Amartha. Following this, Amartha has received series B fund-
ing initiated by LINE Ventures, in 2019. The funding, the value of which has not been disclosed, is also
supported by other venture capital firms including Bamboo Capital Partners (II), which focuses on
social impact (II), and Singaporean lender UOB’s Venture Management (II).
MIE investing at the same time as II (Example: eFishery)

Efishery received investment in 2015 in an undisclosed Pre-Series A funding from Holland-based
Aqua-Spark (II) and Ideosource (MIE). The co-investment was one of the first institutional investors to
support the social enterprise. In November 2018, the social enterprise raised USD 4 million from
investors including Aqua-spark (II), Wavemaker Partners (MIE), 500 Startups (MIE), Social Capital (II),
and others.
13
"Financial Inclusion Insights Indonesia 2018." http://finclusion.org/uploads/file/fii-indonesia-2018-2019-final-report(1).pdf. Accessed 21 Jul. 2020.
14
"Global Debt Database - International Monetary Fund." https://www.imf.org/external/datamapper/HH_LS@GDD/CAN/GBR/USA/DEU/ITA/FRA/JPN. Accessed 21 Jul. 2020.
15
"Internet usage in Indonesia - statistics & facts | Statista." 15 Jun. 2020, https://www.statista.com/topics/2431/internet-usage-in-indonesia/. Accessed 21 Jul. 2020.
16
"Indonesia smartphone users 2011-2022 | Statista." 26 May. 2020, https://www.statista.com/statistics/266729/smartphone-users-in-indonesia/. Accessed 21 Jul. 2020.
16
MIE investing after II (Example: Sayurbox)

Sayurbox was founded in 2016 and participated in the Patamar Capital Accelerator program with
Kinara Indonesia. Through the accelerator program, Sayurbox received their seed funding. After
initial and follow-on investment from Patamar Capital (II), mainstream investors, such as East ventures
(MIE) also invested in 2018 in a seed round however no information indicates they were co-investing.
Tokopedia was reported to have also invested in Sayurbox in 2019
Recommendations
Private capital owners and impact investors can become a catalytic force in leading main-
stream investors into underfunded sectors (beyond financial services). The catalytic role
(similar to the role of governmental aid institutions in blended finance schemes) can be
executed by providing guarantees and financial support that can incentivise more private
investors to fund less popular industries and underfunded social enterprises.
Supply-side stakeholders can also increase the visibility of social enterprises that often go
unnoticed but are in fact financially viable for mainstream investing. This can be done by
conducting investor pitch events, competitions or creating investment networks that high-
light social enterprises in less-known sectors. By doing this, capital owners can further help
steer investments to the less popular-yet-viable investment sectors.
17
1.4.6 Localization of impact investing
Introduction
In the last decade, foreign investors have dominated the development of the impact investment in Indonesia.
They brought capital inflow (sourced from foreign investors), foreign staff (Partners and other team members),
knowledge and best practices from the more developed impact investing markets in Europe, the U.S, and
India. However, the high reliance on the foreign investors has not been entirely beneficial. Many do not have
a full-time presence in Indonesia or lack knowledge of the local context, which drives up the cost of capital
and complicates the investment process due to the geographical distance and currency risk. There is also a
tendency for foreign investors to concentrate on a certain pool of entrepreneurs.
As the impact investment ecosystem in Indonesia is now maturing, we foresee more localization happening,
where investors involve local stakeholders in deploying the capital, including local talents, investors, and
structures. This is going to be crucial, particularly when it comes to providing targeted support to Indonesian
entrepreneurs, and enabling collaboration among other stakeholders to develop the market.
From our data

Figure 1.15 Number of investment by impact investors with localization
PROPORTION OF NUMBER OF INVESTMENT DURING THE PERIOD (%)
68%
56%
60%
42%
33% 32% 33%
40%
25%
20% 11%
0%
0%
EMERGENCE PHASE PARTICIPATION PHASE ADVANCING PHASE
(2013 - 2015) (2016 - 2018) (2019 - 2020)
Local impact investors

Impact investor
with localization
Foreign impact investors with local representatives
Foreign impact investors without local representatives
LOCAL IMPACT INVESTORS
50%
Food and Agribusiness
38%
Waste
FOREIGN IMPACT INVESTORS WITH LOCAL REPRESENTATIVES
32%
18%
Fishery
FOREIGN IMPACT INVESTORS WITHOUT LOCAL REPRESENTATIVES
36%
Financial services
18%
18
Reflections
Different types of localization development

We identify deeper characteristics on how investors obtain “localization” effort across the Local and Foreign
investor groups. Local investors mostly adopt localization as a “strategic effort”, where the local characteris-
tics are enclosed around the structure, branding, capital source, decision making process, and fund deploy-
17
ment. While, foreign investors will mostly do it as an “operational” effort, related to the daily investing activi-
ties such as deal sourcing, negotiation, execution, and post-investment support.
Figure 1.16 Growing localization development and implication

Localization development Implication
Established as a local structure Decision making process is done in Indonesia

STRATEGY
Branded as a “national” fund/investment vehicle Builds sovereignty

Raises local capital Attracts endorsement and/or support from govern-
Single-strategy targeting Indonesian entrepreneurs ment and other local stakeholders
Has a local investment committee Unlocks more local capital
Grooms local entrepreneurs and develops new market
opportunity
Better provision of post-investment support

OPERATION
Hires local team members

Sets up representatives in Indonesia Provides tailored investment structure based on local
needs (e.g. local currency investment)
Better local context during investment decision-mak-
ing (e.g. language, culture, market insight)
Broader outreach to local pipeline
Positive sentiment towards local entrepreneurs

The growth of localization shifts the conversation around impact investment in Indonesia. It signals that there
are sufficient pipelines of Indonesian entrepreneurs who need better local understanding. It is especially
applied to entrepreneurs outside the urban areas and those targeting the grassroot communities. In tapping
this specific pool of entrepreneurs, investors must gauge the nonverbal cues like culture, local language and
the context to provide values. This skill set will improve the whole investment process, from sourcing the
previously “hidden” deals, due diligence, execution, to the portfolio management support.
The national effort

The localization also indicates a broader agenda than the economic opportunities. It helps develop sover-
eignty regarding the higher authority on where and how the capital should be distributed. The ultimate goal
is to build a community resilient, as the domestic capital may help push the internal development without
relying on outside support. Localization emphasizes that the decision-making process needs to be done by
and for local key players. It also leads to the build a stronger local ecosystem; starting from empowering local
talents in the team, attracting local investors, and building a support system featuring local leaders and
institutions.
Recommendations
Advocate a local-friendly structure to incentivize more localization. Capital owners can

play the advocacy role and work with strategic stakeholders to encourage more localization
by impact investors. Beyond policy advocacy (e.g. tax incentives), capital owners can influ-
ence capital owners to increase more participation to local investors by providing catalytic
capital into a local fund.
Develop more local talent pools on the supply-side. With the higher localization activities in
the space, the need of quality talent is increasing. It is important to nurture local talents in the
supply-side as they are the one who own the knowledge and are expected to hold the deci-
sion making process. Investors could propose an employment policy enforcing local team
establishment when investing in a fund and commision projects or capacity building
programs to educate more local investment talents about the impact investment course.
17
For example, YCAB Ventures, Kinara, Gayo Capital (PT SDG), and some mainstream investors such as Mandiri Capital Inonesia with their Indonesia Impact Fund,
BRI Ventures with their Sembrani Nusantara Fund).
19
1.4.7 Investor thematic focus
Introduction
Since impact investment originated from the desire to improve social and environmental outcomes, while
generating profit at the same time, it is not uncommon for impact investment funds to have certain thematic
18
or region focus. Based on Impact Assets 50 list, which showcases 50 global leading impact investors, all of
the impact investors have one or more investment theme focus (as of Aug-2020). The thematic focus does
not only help the fund managers solve certain societal or environmental problems more effectively, but it can
also help them gain superior financial performance, as fund managers will be able to utilise their specialised
19
understanding and knowledge in specific fields to find better opportunities.
For this part of the report, we classified the 66 observed Impact Investors based on three distinct areas;
impact themes, instruments used and geography (refer to figure 1.12).
From our data
Figure 1.17 Number of Impact Inventors with certain focus category
Thematic focus # of Impact Investors
Financial Inclusion 6
Forestry 4
Clean Energy 3
Poverty 3
Gender Lens 2
Impact Themes
Circular Economy 2
Fishery 2
Climate 2
Agriculture 1
Media 1
Sub Total 26
Instrument Debt 12
Geography Indonesia only 5
18
"ImpactAssets 50." https://www.impactassets.org/ia50_new/. Accessed 26 Aug. 2020.
19
"Thematic investing enables private equity investors to ... - Bain." 12 Jul. 2016, https://www.bain.com/about/media-center/press-releases/2016/thematic-investing-in-private-equity/.
Accessed 26 Aug. 2020.
20
Reflections
General focus of impact investors

Based on our research, 26 Impact Investors have shown focus on certain impact themes with financial inclu-
sion as the most popular theme, followed by forestry. We also noted the existence of 12 fund managers which
specialize in debt instruments and 5 fund managers which focus in Indonesia as the main target region.
Key driver of thematic focus

Focus on certain impact themes is usually driven by the demand-side of the investment. Thematic focus
investing, after all, cannot exist without the existence of specific issues and the enterprises that are generat-
ing impact and financial return by addressing these issues. The focus on financial inclusion theme, for exam-
ple, can be linked to the financial inclusion problem in Indonesia (only 26% of Indonesian was financially
20
included in 2016, based on FII research) and how fintech ventures have been driving the improvement in this
21 22
field. The focus on forestry is also an evidence of the ongoing forestry issues in Indonesia. As these issues
get resolved and investment opportunities dwindle, however, in the long term we can also expect private
impact investors to switch their focus themes based on the existence of latest and relevant issues, where
they can find more investable opportunities.
Additionally, focus on certain themes can also come from the push of the capital owners. In impact investing,
the capital owner may have their own agenda to invest their capital in certain themes in order to create CSR
impact or synergy with their main business unit. For example, Circulate Capital’s mission to combat ocean
plastic aligns perfectly with private LPs (Coca Cola, Unilever, P&G, and Danone as capital owners). Thus, the
private companies supported their mission and became the anchor investors for the fund.
Focus on certain instruments comes from factors on both supply-side and demand-side. Fund managers with
an exclusive and in-depth skill set are trying to differentiate themselves from their peers by utilising the
finance instruments that are most suitable to the area that they are targeting. A certain impact investment
firm, for example, specializes in debt instruments since according to their experience, equity instruments are
not suitable for enterprises that they target (Indonesian upstream agriculture enterprise).
The lack of focus in Indonesia as a region represents issues with both the supply-side and demand-side of
the impact investing field. On the supply-side, more than 90% of the impact investors observed in this report
are related to foreign capital and since their region focus is based on larger regions such as Southeast Asia,
they may shift their investment activities freely between the countries in the region. On the demand side,
Indonesia's social entrepreneurship is still quite nascent, with the country ranked 94 in the Global Entrepre-
23
neurship Index rankings, thus limiting the investment pipeline for potential impact investors.
Recommendations
Support less-popular themes: Capital owners can mobilize their capital to support fund man-
agers with focus on impact themes that receive less attention but are still important to the
development of the society / environment nonetheless, and also expected to become a
more important field in the future. This will not only help to ensure that important impact
issues are not being neglected, but may also provide competitive advantage for capital
owners and the fund managers that they support, as the field will be less crowded with com-
peting fund managers potentially looking at the same investment opportunities. Industry
stakeholders can also improve the visibility of these themes by creating events such as
theme focused pitch events and investment conferences etc.
Extracting collective learnings: Supply-side participants could also extract the learnings and
insight of theme-focused fund managers and compile them to further educate the industry
(by publishing reports and helding educational events). Instead of each fund manager having
to go through trial and error by themselves, the collective learnings could shorten the learn-
ing curve so impact could be delivered faster towards the beneficiaries.
20
"Indonesia · Financial Inclusion Insights from Kantar." http://finclusion.org/country/asia/indonesia.html. Accessed 26 Aug. 2020.
21
"How e-payment systems promote financial inclusion in ...." https://techwireasia.com/2020/01/how-e-payment-systems-promote-financial-inclusion-in-indonesia/. Accessed 26 Aug. 2020.
22
"Indonesia Is Reducing Deforestation, but Problem Areas ...." 24 Jul. 2019, https://www.wri.org/blog/2019/07/indonesia-reducing-deforestation-problem-areas-remain. Accessed 26 Aug. 2020.
23
"Global Entrepreneurship Index | Global Entrepreneurship ...." https://thegedi.org/global-entrepreneurship-and-development-index/. Accessed 26 Aug. 2020. 21
1.4.8 Investors facing new challenges
Introduction
In contrast to public view , impact investment funds are, as any entrepreneur, experiencing challenges in
every step of their lifetime, not only the disbursement of the capital to investees. In this part of the report, we
will discuss the general challenges experienced by most impact investment funds through its lifecycle and
also Indonesia-specific challenges based on the fund lifecycle and other segmentation (e.g. local vs foreign
fund).
Past challenges (2013-2018) Current challenges (2019 onwards)
Structuring funds With most funds being first-time funds in the field, As commonality of fund structure are taking into
fund structure is pretty much unregulated and shape and become more regulated, funds are
most fund managers would structure the fund in looking into more innovative fund structures to
any possible way that enables them to earn accommodate investors’ or investees’ needs
funding from investors
Fundraising Impact investing is still a nascent asset class and Attracting local capital is the next step. This
often associated with financial trade off. This should be done by reshaping & educating local
eventually limits the type of LPs participating in investors’ perception of impact investing; Impact
impact funds (mainly global and public capital with investing does not always require a financial
higher sophistication, while local participation is trade off.
still scarce).
Disbursing Since a large part of fund managers are usually With more investors having a specific theme
capital foreign funds with no dedicated representative in focus, the needs to build a thematic pipeline is
Indonesia (93% of Impact Investors), they usually increasing (e.g. women led or circular economy
partner with local intermediaries and other fund related enterprises), but the universe of invest-
managers to build a pipeline specific to Indonesia. able companies are not necessarily matching
This limits the sourcing to only notable and this requirement
exposed social enterprises, i.e. had received Based on our interview with impact entrepre-
funding previously, or within the same network neurs, there is an expectation gap between
circle as the fund managers such as education or entrepreneurs & impact investors, especially in
professional network. terms of financial return and support, leading to
This leads to a minimum deployment of impact social entrepreneurs leaving impact investors
capital in Indonesia. 40% of observed II only and choosing mainstream investors instead.
invested in one enterprise.
Few investors also left the country since they
could not gather enough quality pipeline fitting
their investment mandate.
Managing In terms of impact measurement, there are no Although funds are becoming more sophisticat-
investees standard metrics to measure impact yet in Indone- ed in measuring impact, most of the funds are
sia,i.e. IRIS+. Social enterprises usually measure lacking the specialist knowledge in actively
impact outcome based on their proprietary managing and supporting the operation of their
metrics. Only a few enterprises released their full portfolio companies.
fledged impact measurement for the public. The
general practice is just to note the measurement
on the company website.
No direct incentives to do regular measurement,
other than fundraising or marketing purpose.
Exiting Few successful exit stories in impact investing, Some exits are started to be made by first
investment even though there were many deployment generation investors, but the pressure is mount-
highlights. This affects investors' perception of ing as some funds are nearing maturity.
liquidity of the Impact Portfolio.
22
Local fund (Fund with HQ in Indonesia) International fund (Fund with HQ outside Indonesia)
Difficulties are focused on the early, formation stage of the Difficulties are focused on post formation, later stage of the
fund, such as: fund, such as:
Lack access to capital injection from large global Lack of local knowledge means lack of access to local
players, in addition to difficulties in anchoring local investment opportunities other than the well-known
Limited Partners on impact investment social entrepreneurs that are already crowded by other
Lack access to global best practice in managing an investors, including mainstream investors
impact investment fund Longer time to execute investment process due to
Lack of local human resources to build a good invest- process being conducted in English rather than local
ment team, especially for middle and senior level language
employee
Lack of supporting local legal framework, especially in
terms of legal status and fund structure
Recommendations
Based on the challenges above, in order to help fund managers in impact investment field in
Indonesia, we would like to recommend capital owners to:
Support first time managers (both local and non-local) by conducting branded anchor
co-investment with them. Track record of investing together with capital owners with a
household name will help them gather support from other investors as well.
Utilise network to attract local capital (such as local High Net Worth Individuals, family
offices) to participate in the impact investment field as limited partners. The involvement
of local capital will increase the availability of funds that can be invested in the field.
Provide support to local fund managers, especially in the early stage of their operation, by
providing not only financial resources, but also non-financial resources such as sharing
information on global best practice on impact measurement, or giving specialised training
for the investment team based so that they can improve their investment skills.
Help fund managers find exit opportunities by leveraging business networks in looking for
potential buyers or broadcasting the disposals of its investments.
23
1.4.9 Capital owners behind the Impact Investors
Introduction
Impact investors are usually structured as funds managed by fund managers, in other words the fund manag-
ers are acting as intermediaries between the capital owners and the enterprises invested. In exchange for
administrative fees and a cut on the financial return being generated (if any), the fund managers will adminis-
ter the capital (from selecting the enterprises, supporting the portfolio and providing exits). These capital
owners may vary, from Government agencies to family offices.
In this section, we have compiled our unique observations on the capital owner (or LP) behind the impact
investors to understand who are the key institutions driving the impact investing scene in Indonesia.
From our data

Figure 1.18 Overview of capital owners related to impact investment industry in Indonesia
Unique Average Estimated

Participation Ticket size
Type Capital ticket size Investment* Example
in fund (USD million)
Owner (USD million) (USD million)
Government
agencies and REEEP, International Finance
development 6 6 1 - 20 10 60 Corporation, ADB
institutions
(multilateral)
Government
agencies and
development 14 24 1 - 20 10 240 USAID, DFAT Australia
institutions
(bilateral)
Philanthropists Rockefeller Foundation,
and founda- 14 17 1-5 3 51 Ford Foundation, YCAB
tions
Private
corporations
(Corporation & 26 30 1 - 10 5 150 Coca Cola, Unilever
Financial
Institution)
Family
1 1 1-2 1.5 1.5 Undisclosed
office/HNWI
Total 61 78 502.5
Notes: Estimated investment represents the total amount deployed globally, not only for Indonesia
24
Reflections
Difference between capital owner composition in impact investing and mainstream investing
Based on our database, we observed a total of 61 capital owners providing an estimated USD 502.5 million
24
to impact investors targeting the Indonesian market. Nearly half of this capital was provided by government
agencies (bilateral agencies, i.e. USAID-USA, DFAT-Australia), followed by private corporations such as
Coca-Cola or Unilever.
The larger share of involvement from bilateral development institutions, while expected, is also a testimony
to the nascency of the impact investment field. In the more mature mainstream private equity scene, for
example, conventional financial institutions contribute to a large portion of the capital owner. Public pension
fund, asset manager and insurance company, makes up 43%, 13%, and 13%, respectively, of the top 100 Limit-
25
ed Partners of private equity globally in 2017, according to Preqin report.
We believe that this discrepancy is mainly based on the fact that conventional financial institutions historically
perceived impact investment to possess lower financial return to their mainstream investment counterpart,
thus limiting their participation in the field since they have specific mandate to achieve a certain minimum
level of financial return.
Expected change in capital owner participation in the future

The situation mentioned in the first point above, however, is gradually changing globally. According to Rede
26
Partners survey of US and European limited partners (LPs) in private equity and venture capital scene, 98% of
the LPs surveyed expect market-rate or better financial returns from impact investment, showing a changing
mindset about the impact investment industry in general. Additionally, underlying stakeholder (e.g. family
offices from millennials, university endowments from students) appetite for allocation to impact investment
has also been cited by the surveyed limited partners as a major driving factor in their growing interest in the
field. In addition to further educating capital owners regarding acceptable financial return of impact invest-
ment (refer to part 1.4.1), the increasing requirement for “impact” result from LPs stakeholder will eventually
push conventional financial institutions to increase their participation in the field as capital owners in the
coming years.
Recommendations
Capital owners who are already involved in the impact investing industry can act as a
promoter and help attract non-participating conventional LPs by becoming anchor co-in-
vestors in viable investment funds or provide detailed information regarding the leading
investable funds in the field. This type of cooperation should give new LPs the assurance and
confidence that they need in venturing into the new field of impact investing.
Similarly, capital owners can also educate impact investors / fund managers how to better
raise funds from and work together with conventional financial institutions by informing
them about the typical fundraising process with financial institutions, the reporting require-
ment post fundraising period. Improving the readiness of the impact investors in engaging
conventional financial institutions should also lead to further participation of conventional LPs
in the field.
24
Based on publicly available data. List is non-exhaustive.
25
"PREQIN SPECIAL REPORT: THE PRIVATE EQUITY TOP 100." https://docs.preqin.com/reports/Preqin-Special-Report-The-Private-Equity-Top-100-February-2017.pdf. Accessed 26 Aug. 2020.
25
"LP stakeholder pressure for PE, VC impact investing means ...." 21 May. 2019, https://www.altassets.net/knowledge-bank/by-pe-focus/infrastructure-real-estate/lp-stakeholder-pressure-for-pe-vc-
impact-investing-means-demand-is-outstripping-supply.html. Accessed 26 Aug. 2020. 25
1.5 Impact Investing Case Studies in Indonesia

1.5.1 Introduction
27
Having mapped the presence of impact investors' in Indonesia, this section uses case studies to highlight
common practices, funding activities, capital deployments and portfolios in Indonesia and their future funding
commitments to the market. The case studies includes gauging deeper into emerging strategies of the inves-
tors or how impact is incorporated into the investment processes and strategies. By looking into these institu-
tional investors' approaches to impact investing, we recognise the common and widely applicable practices
of impact investing in Indonesia.
We have selected 20 impact and mainstream investors who have demonstrated unique characteristics of
investment, operation and strategy for Indonesia. In addition, they are either:
impact investors with significant presence or footprint in Indonesia, or
impact investors who are currently and actively prospecting in Indonesia.
Figure 1.19 gives an overview of the identified impact and mainstream investors activities in Indonesia. We
highlight the estimated deployment of the fund, their target allocation, their instruments and their investment
stage appetite. We have also included the number of portfolios of enterprises that are operating in impact
areas operating in Indonesia. The data we have collected is based on the collected information gathered
from press research and interviews with representatives of the investors.
Figure 1.19 Impact and mainstream investors highlighted in the case studies
Target Allocation
Number of Instrument Stage of Investment

Estimated Deployment to % of total HQ Increased
Indonesian
Indonesia (USD Million) fund commitment
portfolio Debt Equity Seed Venture Growth
53.8 42% 2 EU
Indonesia as
20 key market 0 ID
12 3% 4 US
9.3 5% 1 US
7.6 15% 4 IN
Impact Investor
6.2 5% 3 SG
3 60% 7 SG
3 3% 1 SG
2 100% 3 SG
1.7 6% 4 EU
1.2 12% 5 ID
1 10% 1 SG
Prospecting 50% of fund in SEA 0 PH
250 50 - 70% > 75 ID
65 24% 6 ID
Maintsream investor
56 >30% > 30 US
30 100% 13 ID
1 3% 1 SG
0.8 100% 2 ID
0.7 7% 5 SG
27
The case studies are not made available publicly.
26
1.5.2 Key characteristics

We selected key factors and identified the distinctive characteristics to benchmark the selected investors
included against each other.
Figure 1.20 Key Characteristic of Investors
Investor Name Distinct characteristic
Patamar Capital First generation with notable success cases

Strong local presence & involvement in the ecosystem
Commitment to Gender Lens
Increased commitment to Indonesia
C4D Partners A spin-off of an NGO prior to investment activity

Blended finance approach to better tailor risk return appetite
Hybrid instrument in investment with less clear exit scenarios
Gender lens allocation target within the existing fund
Aavishkaar Capital First generation impact investors in Indonesia

Increased commitment to Indonesia
Senior local team based in Indonesia
Commitment to ecosystem building in the region
Garden Impact Less spotlighted impact investor despite notable track record
Investment Impact investor with a patient capital mindest
Registered Variable as Capital Company (VCC) to expand and manage more capital
Active involvement in the ecosystem
Kinara Indonesia First generation local impact investor

Refocused activity to ecosystem building through accelerator program
Theme focused accelerator program
Notable success of companies in the accelerator programs
Quona Capital Vertical focused in tech enabled financial inclusion

Prior engagement with Ford foundation
Circulate Capital Single theme focus with significant fund size

Blended finance as a de-risking investment mechanism
Impact measurement commitment
Post investment support and Involvement in the ecosystem
Moonshot Ventures New impact investor prospecting Indonesia and developing innovative blended finance
Introducing a new business model: Platform for theme specific micro-funds
Commitment to gender lens
Designing Incentive model for impact generation
ADB Ventures A new investment arm of ADB

Beyond capital investment: a fund manager and provider of technical assistance program
Long term and financing partnership scheme
Gayo Capital Indonesia focus fund legally incorporated in Singapore

Venture debt vehicle
Full Indonesian VC experienced team (HQ in Jakarta)
Lonsdale Social Family office backed impact investor

Innovation Capital Involvement in impact ecosystem building
TLFF: PG Impact Intensive impact approach: predetermined impact criteria, alignment to IFC impact operating
Investment principle, and integration of impact objective to SDGs
Funds on funds investment to leverage expertise and market know-how of target fund managers,
resulting in diversified global funds
TLFF: &Green Single strategy focus and jurisdictional eligibility requirement

Provision of capped guarantee to attract mainstream investment
Senior team member with deep expertise in Indonesia
27
East Ventures First generation of tech VC in Indonesia

Most active VC with pivotal role in tech ecosystem building
Mainstream fund with high sensitivity to impact
Portfolio operating in impact premises and measuring impact
Relationship with Indonesian government
500 Startups Early player and most active VC in the Southeast Asia
Fundraising for the third Southeast Asia fund with Indonesia as key market
Notable portfolios and exits operating in impact premises
A mainstream fund with strong involvement in impact ecosystem
BRI Ventures Mainstream investor with impact area as investment thesis

Incorporated fund in Indonesia under the Venture Capital Company (PMV) structure
Mandiri Capital + Mainstream investor managing the ABAC Indonesia Impact Fund (AIF)
Indonesia + Plan to adopt blended finance structure
+ Incorporation in Indonesia and Singapore
Teja Ventures One of the only women founded and led VC firm
Commercial approach to gender lens investing
Integration of gender lens to investment process
Strong focus in Indonesia with speedy deployment
Genesis Alternative Southeast Asia’s first private venture debt fund

Ventures Increasing commitment to Indonesia
Investors (LPs) including global impact investor
Interest in investment into impact areas
Northstar Interest in investment into impact areas

Foundation Early mainstream investor approach to impact investment
28
1.5.3 Recommendations
We have designed a set of 17 key factors that will enable anyone to benchmark investors with each other. We
have also highlighted the factors that are prioritized in comparing the fund managers. In benchmarking the
funds, the key factors have different weight of significance. In prioritising the key factors, we have highlighted
in blue have more weight compared to the key factors highlighted in yellow
Figure 1. 21 Key factors to benchmark
Ranking
Factor Definition
High Medium Low
Commercial portfolio Assessment of the investor Successful exits (matching Fund IRR No successful exits (matching Fund Numerous failed investments
quality (reputation, portfolio in terms of commercial objectives) IRR objectives) (closed down)
growth, exit perspective) opportunity, exit perspective Most portfolio with significance Some portfolio with significance Stagnation of most portfolio
performance milestones (e.g. new performance milestones (e.g. new companies
markets, growth of HR, new markets, growth of HR, new
fundraising) fundraising)
Strategic design of Quality of the design of the Investment fit to most investment Some investment fit to most No investment fit to most
investment thesis investment strategy and offering opportunities in Indonesia investment opportunities in investment opportunities in
fitting the Indonesian market Understanding of market, impact, Indonesia leading to some difficulty Indonesia leading to consistent
characteristics in general and the and deal availability in Indonesia to invest difficulty to invest
opportunities
Investment footprint in Experience and track record of More than 3 investments made in Between 2-3 investments made in Only one investment in Indonesia
Indonesia and confidence investing specifically in Indonesia Indonesia No capacity to invest without
Indonesia. Level of Demonstrated capacity to lead Willingness to take lead on co-investment
independence and confidence in investments investments
conducting investments
Impact portfolio quality Assessment of the investor Portofolio generating impact at Portofolio generating impact at Unclear impact thesis of the
(reputation, impact scale portfolio in terms of impact scale and depth scale or depth but rarely both portfolio
and depth) opportunity, impact potential Impact of the portfolio is aligned Impact of the portfolio is sometimes Inability to articulate the impact of
with the Government priorities aligned with the Government the portfolio
Portfolio is considered as best priorities
practitioners in the field Portfolio is sometimes considered
as best practitioners in the field
Financial instrument Development of new investment Offer new investment schemes to Some initiative to offer new Low innovation offering
innovator schemes/instrument beyond address market needs investment schemes to address Low understanding of the financial
classic equity/debt to better fit Master the instruments and willing market needs instruments available
local entrepreneur needs to educated the market Engaged in reflection to provide No reflection or intention to provide
more financial innovation to more financial innovation to
entrepreneur entrepreneur
Supporting local talent Proportion of investment made Significant investment to Indonesian Investment to foreign led enterprise No engagement with local
(Indonesian) into local indonesian founders with string Indonesian team Indonesian talents
entrepreneurs (vs. foreign based Investment to SE outside of Jakarta Depend highly on foreign talent
or foreign led) or urban cities network
Approach to impact Quality of the impact articulation, Thorough impact articulation Applying ESG in their operations No clear impact framework
thesis, measurement measurement and strategy Applying structured impact Conducting negative screening No articulated impact thesis
measurement framework Conduct simple impact
Ability to educate over investors on measurement based on their
their process (source of best verticals and objective
practice)
Gender parity Inclusion of women into the Presence of women partner No women partner but women No women partner or women
investment leadership Women part of the investment investment manager (senior role) investment manager (senior role)
committee Women part of the investment No women part of the investment
committee committee
29
Ranking
Factor Definition
High Medium Low
Industry peer reputation Reputation of the investor among Always solicited as knowledge Neutral opinion on the value on a Non persona grata in coinvestment
in Indonesia other investors center related to investing coinvestment Call the latest as last resort option
Trust in ability to lead investments Co-invested with notable lead No deal share to the investor
Bring value in the deal syndication investor
Always source of good deals Sometimes source of good deals
Awareness among Reputation and awareness of the Mention first as leading investor Secondary mention by Unknown to local entrepreneurs
entrepreneurs in investors from the entrepreneurs Entrepreneurs have clear idea of entrepreneurs and ecosystem players
Indonesia the fund investment/impact thesis Entrepreneurs have a broad idea of Entrepreneurs have no idea of the
the fund investment/impact thesis fund investment/impact thesis
Post investment support Support provided to portfolio Successful follow on investment Sporadique support to No dedicated support to
companies after the investment Dedicated HR support for entrepreneur entrepreneurs
(mentoring, access to networks, entrepreneurs Focus on reporting and monitoring Focus on reporting and monitoring
follow-on investments) Use monitoring to drive support without systemic action without action
Low access to follow on investment
Efficiency of capital Speed, fluidity of capital Deployment in the first 6 months of Industry standard to deploy the Difficulty to deploy capital due to
deployment disbursement of the investors fund fund (2-3 years) lack of pipeline or slow process
Fast disbursement of fund to Average process (50% above the Long process (50% above the
entrepreneurs (e.g 2 months after average execution timing) average execution timing)
agreement)
Investment gap filler Investment in identified Mostly Investing in identified Allocating funding in investment Not investing or considering
investor investment gaps where investment gaps gaps or/and considering it investing in investment gaps
entrepreneurs classically have Investing in gaps without the need Mostly doing co-investment with
difficulty to raise capital (due to of co-investor(s) or lead investor(s) impact investors or mainstream
limited supply) investors
Involvement in the Contribution of the investor to Active contribution to building the Sporadique contribution to building Absence at key dialogues
Indonesia Impact ecosystem building beyond ecosystem and the demand side the ecosystem and the demand Low request from stakeholder to
ecosystem (e.g. activity, investment footprint Often called as expert/resource side engage the investor as expert
FGD, speaker) person Sometimes called as expert/re-
Strong SEO source person
Assets under Capital managed by the investor Over USD 15 million under Between USD 8 and 15 million Less than USD 8 million under
Management (AUM) management under management management
Longest presence in Time spent in prospecting and Over 5 years of experience in 2-5 years of experience Less than 2 years of experience in
Indonesia investing in Indonesia Indonesia Indonesia
30
2020
Indonesia
Part 2
Demand-side:
Hearing from the entrepreneurs
Part 2: Demand-side: Hearing from the entrepreneurs Investing in Impact in Indonesia - 2020
2.1 Introduction
Despite the fact that social enterprises are the center of the impact investing industry, there is no definitive
documentation of the actual number of social enterprises in Indonesia. Previous estimates by researchers
estimated the number of social enterprises in Indonesia, ranging from 1,400 28 to 342,02529 The large
discrepancy between these estimations is likely due to differing definitions, differing methodologies and
the fact that most social enterprises are also MSMEs, which are also generally not well documented (see
Appendix). Based on the data collected through our methodology, we estimate that there are 182,000
social enterprises in Indonesia (see Appendix for details on our methodology).
In November 2019, the ANGIN investment team conducted a focus group discussion (FGD) with 14 Indone-
sian social entrepreneurs and mainstream entrepreneurs to gather their feedback and insights on their
previous and current engagement with impact investors30. The discussions highlighted some interesting
insights such as the clear disconnect between the expectations of impact investors and entrepreneurs.
Therefore, to contribute to the growth of impact investment in Indonesia, we have undertaken a further
round of data collection sought to give more voice to the experiences, needs and expectations of entre-
preneurs who have been through the fundraising process with impact investors. This section aims to show-
case their personal experiences - bringing attention to the gaps between the perception and reality of
impact investing and what can be done in Indonesia to address this.
2.2 Our approach: The fundraising journey

We leverage the fundraising journey of a typical entrepreneur searching for capital in Indonesia to better
capture insights at each stage of the fundraising journey. Indeed, the various stages involve different inter-
actions between entrepreneurs and investors.
Figure 2.1. Fundraising journey
06
Exit
Timing
Strategy
05
Follow-on Investment
Follow-on investment
04
Portfolio Support
Other supports
Governance
Reporting
03
Negotiation and
Impact management
Non-monetary support
02
Due Diligence
Execution
Impact analysis
Investment structure
Impact analysis Term sheet
Documentation Documentation
execution
01
Requirement
Introductory Phase
Investor mapping
Investment need
Ticket size
Impact thesis
28 BCG, 2015. “The art of sustainable giving”. https://image-src.bcg.com/The-Art-of-Sustainable-Giving-May-2015_tcm93-40480.pdf . Accessed 27 July 2020.
29 BritishCouncil, 2018. “The state of social enterprise in Indonesia”. https://www.unescap.org/sites/default/files/the_state_of_social_enterprise_in_indoensia_british_council_web_final.pdf .
Accessed 27 July 2020.
30 That FGD was commissioned by an Indonesian impact fund to better understand the market to shape a more impactful and tailored impact structure.
32
1. Introductory phase
Entrepreneurs and investors meet and explore potential engagement based on capital needs, ticket
size and alignment of impact thesis.Usually at this stage, the entrepreneur is the one contacting the
entrepreneur with a deck/presentation or the investors is reaching out to the entrepreneurs through
referral.
2. Due diligence
After both parties validate the mutual interest to discuss the investment, investors assess the enter-
prise’s various areas such as the business plan, financial and legal status, levels of governance, impact
analysis, theory of change, documentation and administrative or legal requirements. This step aims to
give confidence into the enterprise opportunity.
3. Execution
If the due diligence is positive, the investor and entrepreneur negotiate the investment terms and struc-
ture (usually summarized as a term sheet), complete the administrative requirements, and, finally, the
capital is disbursed to the entrepreneur.
4. Portfolio management
This varies depending on how the relationship is governed between the entrepreneur and investor(s).
It may include simple reporting (financial and impact), iand/or non-monetary support like technical
assistance or mentorship.
5. Follow-on investment
This stage may include additional investments to support the enterprise growth or making connections
with other potential investors.
6. Exit
This represents the time where investors are selling their shares, getting repaid for their loan.
33
2.3 Key insights

Through an online survey (89 responses) and 35 semi-structured interviews with entrepreneurs who have
been engaged with impact investors (see Methodology) we captured several unique insights and feedback
on the fundraising process in the context of Indonesia.
2.3.1 Successfully funded social enterprises in Indonesia

2.2 Overview of successfully funded social enterprises
SE1 : 71 SE2 : 20 EI : 129
23%
Financial services
14%
Financial services
36%
Financial services
27%
Food and
14%
Food and
20%
Food and
Agribusiness Agribusiness Agribusiness
48%
Tech-driven
77%
Tech-driven
95%
Tech-driven
business model business model business model
26% 14% 87%

Women-led Women-led Women-led
64%
Headquartered
77%
Headquartered
91%
Headquartered
in Jakarta in Jakarta in Jakarta
70%
Early Stage
68%
Early Stage
85%
Early Stage
(Seed & Series A) (Seed & Series A) (Seed & Series A)
We identified 71 social enterprises funded by impact and mainstream investors (SE1) and 20 social enter-
prises (28%) were funded by mainstream investors (SE2).
Our database also captures 129 mainstream enterprises that operate within impact areas (EI), but do not
have both clearly stated impact intentions and clear impact measurement. Thus, we could not classify them
as a SE1 or SE2 in our framework.
As SE2 and EI are both enterprises that received funding from mainstream investors, the data reflects
mainstream investors preference for certain categories or types of enterprise when making investments.
The focus on financial services and tech-based business is consistent with what we have observed in our
comparison between MIE and Impact investors when investing in SE1 in the earlier part of this report (refer
to part Figure 1.8 Distribution of concessionary compared to non-concessionary investors).
The inclination on non-women led business, signify the lack of gender-lens support in the social entrepre-
neurship scene, as the overall entrepreneurship scene in Indonesia is quite balanced in terms of gender
equity (based on Global Entrepreneurship Monitor data as of 2018 31 )
The focus on the location in the capital city Jakarta is related to both (1) the abundance of various resources
needed to establish an enterprise and (2) the proximity with the operation base of the investors who have
representatives in Indonesia, majority of which have a team located in Jakarta.
The majority of the funded companies being early-stage is a testimony to the nascent social entrepreneur-
ship in Indonesia and thus resulting in VC-type investors being more active in the scene and investing in
the earlier stage of the social enterprises (Seed and Series A).
31 "Entrepreneurship in Indonesia - GEM Global ...." https://www.gemconsortium.org/country-profile/70. Accessed 28 Aug. 2020.
34
2.3.2 Bargaining power during fundraising

Figure 2.3. Bargaining power of social enterprises during fundraising
WEAKER BARGAINING POWER STRONGER BARGAINING POWER
Financial return
expectation The misfit The in-between The trailblazer
Business model Non-tech/ offline Mixed Tech
Growth path Conservative Medium Aggressive

Primary
Impact scale Depth Combined Reach
Progress Early Validating Proven
Sector/industry Mature Emerging Hot
English proficiency Low Medium High

Secondary
Financial literacy Low Medium High
Branding / Exposure Low Medium High
Location Outside large cities Secondary cities Jakarta
In theory, entrepreneurs should be able to access the financial capital they need from various investors as
they pass through the different stages of growth and maturity. In current research there is often a great
emphasis on the so-called "missing middle"32or “funding gap”, usually defined as the type of entrepre-
neurs who cannot access financial capital due to certain characteristics. Typically the “funding gap” will
affect entrepreneurs in early growth stages who are struggling to fundraise what they need to scale their
enterprises - with typical ticket sizes between USD 100,000 - 500,00033 in Indonesia.
Proposed solutions to close the gap often focus on helping the entrepreneurs to become more invest-
ment-ready to get them closer to the investors' risk appetite and requirement for the due diligence.
However, in Indonesia the investment gap continues to prevail and is particularly apparent in certain
groups of entrepreneurs (Figure 2.3). Therefore, for a more nuanced and context-specific analysis, we
have broken down characteristics that define an entrepreneur's ability to access capital. We then identi-
fied three typical profiles of entrepreneurs based on their differing degrees of bargaining power during the
fundraising: misfits, inbetweeners and trailblazers.
“The Trailblazers” are those who usually succeed in their fundraising. They are typically seen as the
“investment-ready” entrepreneurs who are tech-driven to help them scale, pursuing aggressive growth
paths, aiming to impact a large number of beneficiaries, and operating in the sectors perceived as promis-
ing by investors. English proficiency and being located in Jakarta or other major cities also strengthens
their bargaining power; giving them exposure to networks of investors, many of whom are foreigners and
English-speakers.
Meanwhile, “misfits” who are somewhat unpopular amongst mainstream and impact investors because
they are perceived as being less investible or appealing. They typically hold characteristics that are the
inverse of trailblazers and tend to lose out in this continuum of capital.
The “in-betweeners” are those who are more likely than misfits to receive funding, but the pool of capital
they can tap may be niche or limited at a later maturity stage. Mostly, they are entrepreneurs with conserva-
tive growth paths compared to the trailblazers one. It is usually due to the limited role of technology on the
business model or the specific sector that are only interesting for a particular group of investors, such as
sustainable food and renewable energy.
32 AVPN. “The Continuum of Capital in Asia”. https://avpn.asia/insights/continuum-of-capital/ . Accessed 4 Aug. 2020.
33 SEED, 2020. “Filling the missing middle… paper Indonesia”. https://seed.uno/articles/filling-the-missing-middle-financing-gap-scoping-paper-indonesia-2020 . Accessed 28 July 2020.
35
2.3.3 Different perceptions of “opportunity”

Social entrepreneurs in Indonesia and investors tend to view opportunity differently. Social entrepreneurs
tend to look at an opportunity from the impact perspective - they see potential to address specific social
and environmental problems. Some entrepreneurs are particularly focused on the depth of impact, empha-
sizing on how their solutions address very specific issues and serve the needs of the target audience or
beneficiaries. This is particularly obvious during pitching sessions where social entrepreneurs tend to
allocate a large amount of their time on the problem statement or inspirational story telling vs. the solution or
market opportunities display 33 .
Meanwhile, impact investors see an opportunity from the market and commercial lens. They tend to priori-
tize scalable solutions that also tap the wider market with the expectation that this will bring greater financial
return.
Due to this misalignment, entrepreneurs interviewed expressed surprise that impact investors are not as
“impact-oriented” as they initially thought. Entrepreneurs, especially those who are focused on specific
social and environmental issues, find it difficult to secure investment from the impact investors they encoun-
tered. Their solutions were seen less attractive from the investment point of view due to the lack of commer-
cial cases and limited scalability of their solutions. This brings a certain confusion among entrepreneurs about
the kind of “impact” intended from the view of the “impact investor”.
Entrepreneurs also highly associate impact investors as concessionary 34 , where impact investors are
expected to accept a lower financial return for the impact creation. It was translated into the expectation that
impact investors shall provide friendlier investment terms than mainstream investors (e.g. lower interest rates
for loans, better valuation for equity, etc), and shall discuss more on the impact target instead of financial
growth. Facing the fact that 89% of the impact investors are actually non-concessionary, entrepreneurs
expectations were not met when they engaged with the impact investors.
2.3.4 Attention to impact during the fundraising journey

During interviews with entrepreneurs, we explored where impact analysis (mostly referred to as impact
measurement) is currently conducted during the fundraising journey.
Figure 2.4 Impact analysis during the fundraising journey

Impact Thesis Impact Output Impact Outcome
Impact analysis Transition to Investment committe Capital

sophistication due diligence decision injection
Few impact investors

monitor impact post
investment beyond
simple reporting
Discussion mostly around
impact thesis and IRIS
sector focus as the first
“filter”.
Foreign-led impact investors
Different sophistication of
Questions about Impact metrics validation impact practice
impact metric, supported by site visit,
but mostly “outputs” impact report submitted Indonesian impact investors
instead of “outcomes”. focusing on “outcomes”
Fundraising journey
Introduction phase Due Diligence Execution Post-investment
34 ANGIN experience based on more than 2,500 decks from Indonesian entrepreneurs received since 2016
35 See 1.4.1
36
In general, the entrepreneurs interviewed reported that impact analysis by investors tends to be mostly
conducted during the pre-investment stage, where entrepreneurs are usually asked questions around
the impact thesis, theory of change and basic impact metrics. Questions about impact usually continue into
the due diligence phase, which mostly involve a site visit, before the decision to invest is being made. Very
few impact investors tend to monitor the impact achievement after the capital is injected.
Local impact investors are less sophisticated in measuring the impact compared to the foreign counter-
parts. Most of the tools related to impact measurement are being developed and promoted by foreign
impact investors such as SEAF or IIX.
Impact analysis done by impact investors is still heavily focused on the immediate “outputs” of the enter-
prises such as the number of beneficiaries, number of areas of operation, or number of products/services
provided. In doing so, they fall short of measuring the “outcomes” - the changes occurring for the intended
beneficiaries after the products or services are introduced by the enterprise. Impact investors have a
tendency to only capture the surface of impact. Meanwhile entrepreneurs frequently care about their
depth of impact and outcomes of their operations.
2.3.5 Bottom-up approaches of impact measurement and management

Impact measurement justifies the organizations’ commitment of creating impact, where investors and
entrepreneurs monitor and quantify the impact they envisioned. It has become a cornerstone of impact
investing and social entrepreneurship. Previously, the urgency of conducting impact measurement was
driven by top-down forces: entrepreneurs were expected to track their impact as part of the donor or inves-
tor monitoring and evaluation requirements.
Today, impact measurement is increasingly embedded into the entrepreneur’s decision-making processes
and has become a bottom-up tool for managing impact, instead of only “measuring”36. With this nuance,
impact becomes a strategic objective of the enterprise and encompasses the business activities.
Capital owners have been supportive in this change of paradigm towards impact measurement, but there
are different views on who should bear the cost. Moreover, most entrepreneurs still find it difficult to
implement impact measurement or management due to limited resources and data gaps. Some accelera-
tor programs offer impact management and measurement modules, even for the early-stage enterprises
(e.g. SIAP, RISE inc, ImpactAim by UNDP). In addition, an increasing number of advisory service providers
are specializing in impact measurement tools and services. Some of them target investors as their custom-
ers (e.g. SteerImpact), while others serve entrepreneurs (e.g. Artemis Impact and SIAP Impact Management
service).
36 Simon, M. 2015. “Managing vs. Measuring Impact Investment” https://ssir.org/articles/entry/managing_vs_measuring_impact_investment
37
2.3.6 Expectations of support

In addition to financial capital, the social entrepreneurs expect non-financial support beyond the capital
(intellectual and social capital). In particular, portfolio support and follow-on funding process support are
top priorities of social entrepreneurs in Indonesia.
Figure 2.5 Entrepreneurs’ expectation on impact investors
Top Insights
Entrepreneurs expects that impact investors...
Display strong expertise and

Provide training and mentoring
track record in funding success
stories
Provide training and mentoring Help me achieve my impact objective

and measure my social impact
Help me achieve my impact objective

Offer more flexible capital or
and measure my social impact
payment terms
Data collected from online surveys
Entrepreneurs based in Jakarta
Entrepreneurs based outside Jakarta
Portfolio support expectation includes growth enabler needs (access to market, network, knowledge, and
talent), branding, advice on the corporate strategy, mentorship, and other capacity building provided by
investors to the enterprises they invested in. However, very few impact investors seem to assist in these
areas. They rarely spend much time providing entrepreneurs with in-depth support. There are several
reasons explaining the situation:
It is not the investors’ value proposition to provide strategic support

The impact investors are not the lead investor in the investment round (i.e. support is taken
over by the main investor or lead investor)
The impact investors do not have sufficient resources, team / contextual knowledge on the
ground
Instead, some third-parties are providing this support for an additional cost. For example, a number of
overseas intermediaries and consulting firms are aligning themselves with the impact space; offering Indo-
nesia’s entrepreneurs technical assistance as additional service with more affordable payment schemes
(e.g. RISE program by Swisscontact).
On the other hand, impact investors seem to be helping with follow-on phases, such as topping up the
investment or introducing entrepreneurs to a wider investor network. Being associated with prominent
impact investors can also build the entrepreneur’s credibility and bargaining power in the next fundraising
round.
38
2.4 Recommendations
2.4.1 Impact investment skills for investors
The data indicates that early-stage entrepreneurs value impact investors from the support they can
provide beyond the financial capital. To build this value proposition, particularly to better serve the pool of
in-betweeners, impact investors need to develop a specific set of experience and skills including:
Expertise in developing and establishing basic operations, capital discipline and a viable
impact business model that is workable in Indonesia. For a country with a nascent social entre-
preneur environment such as Indonesia, investors often need to develop the ability and risk appe-
tite to provide early / seed investment in order to push an experimental, yet viable, business to the
next stage of growth.
Know-how in balancing economic returns with social impact, as well as the stamina to commit
to and measure the dual bottom line. One way to create this balance is to address typical major
shortcomings in the general business management of social enterprises such as financial model-
ling, business-plan preparation and management evaluation.
To be noted that data points to alignment shortcomings in areas like financial modeling, busi-
ness-plan preparation, and the evaluation of management, which can be a major risk in impact-in-
vestment portfolios.
Expertise in systematic expansion and scaling up including experience in refining processes and
developing talent.
2.4.2 Tailor investment product development for the Indonesian impact market
The top concern of the entrepreneurs we spoke with is their difficulty understanding and comparing invest-
ment schemes (e.g. instrument, terms, clauses) offered by various impact investors, and how to differenti-
ate one scheme from another. It is key for investors and fund managers to improve their marketing practices
and investment product development to grow their investment portfolio in the Indonesian market. For exam-
ple:
Investors need to be up-front with entrepreneurs about the extent to which individual investment
schemes balance or prioritise social or environmental impact and financial returns in their objec-
tives. For example, can entrepreneurs negotiate better investment terms if they can show they are
creating significant impact?
Create impact investment funds concentrating on specific sectors or issues, in a similar way to
how other funds focus on certain geographies, industries, or asset classes. Narrowing focus will
better enable investors to set realistic expectations for financial returns and measure impact, as
well as provide targeted offerings and relevant non-financial support.
Impact-oriented investment firms in Indonesia should integrate mainstream investment prac-
tices into their financing mechanisms to appeal to a wider range of limited partners and increase
the assets under their management.
39
2.4.3 Enable local partner assistance

Impact investors would benefit to work together with local partners - investors networks, local incubators
and local fund managers - to gain deeper, contextual insight when evaluating an enterprise (including
levels of risks, expected returns and potential impact).
Local partners can also help find impact-driven enterprises that are profitable but easily overlooked by
overseas investors, and also help effective communication with entrepreneurs.
2.4.4 Use impact measurement to guide both profit and outcome

Impact measurement is a means of enabling continuous and sustainable impact, and yet entrepreneurs
often consider it to be a burden, particularly during the pre-investment stages. However, impact measure-
ment should be embraced as a set of management tools for building both business and impact capacities
of early-stage entrepreneurs. The following actions can be considered by impact investment industry
stakeholders to promote the effective uptake of impact measurement by entrepreneurs in Indonesia.
As the scale of impact produced by an enterprise is often positively correlated to the financial
performance of that enterprise (i.e. larger impact, better financial condition and vice versa), impact
investors should consider monitoring more the relationship between these two factors, and also
educate entrepreneurs how bigger impact can lead to better financial situation of their enterprise,
and thus how important it is for entrepreneur to measure their impact meticulously.
The provider of capital through blended finance schemes or philanthropic funding, which tend to
be concessionary, can leverage their position to support the proper creation and measurement of
impact, and also set higher requirements of impact return from the entrepreneurs, in order to instill
the discipline of measuring and creating impact.
Further questions on this is (1) how willing are impact investors in translating impact analysis into financial
return, and (2) how does the blended finance scheme takes part in addressing those needs of these entre-
preneurs, e.g. (3) first loss capital or leverage philanthropic funding to pay the non-monetary support; for
sustainability.
40
2020
Indonesia
Part 3
Impact investment opportunities in
Indonesia
Part 3: Impact investment opportunities in Indonesia Investing in Impact in Indonesia - 2020
3.1 Introduction
Impact investing in Indonesia is fueled by opportunities to generate impact while generating financial return.
However, these opportunities are seldom well-defined due to the wide range of impact areas. Based on the
data gathered, we highlight the areas of opportunity in Indonesia where impact investors can drive significant
social or environmental impact, while at the same time attaining targeted financial return (concessionary and
non-concessionary). We went beyond this analysis to define what are key factors that investors should
consider to tap these opportunities in Indonesia.
3.2 Our approach to defining impact investing

opportunities
Figure 3.1 Three aspects of investment opportunities
Investment opportunity
Capacity:
Market
Pipeline and funding Potential for impact
opportunity
availability
Investor fit
We consider that an investment opportunity should be analyzed with three angles:
1. Potential for Impact

How much impact could be generated according to the social and environmental challenges in
that area (e.g. agriculture, waste, gender and MSME development).
2. Market opportunity
How is the potential to generate financial return. That is usually assessed through market sizing,
competition structure, market dynamics
3. Capacity (pipeline and funding availability)

While the potential for impact and market opportunity are validated, the last angle to analyse is the
availability of both investors and investible enterprises tapping into the impact and market oppor-
tunity. An investor would usually only be able to tap into an opportunity if there are existing solu-
tions/entrepreneurs to invest in.
42
3.3 Four key investment opportunities

We have identified four areas that represent strong investment opportunities. For each area, we have identi-
fied the type of investors (Investor Fit) that would be well suited to that area.
3.3.1 Impact area one: Agriculture supply chain efficiency
Potential
Potential for
for Impact
Impact
Indonesia's agriculture supply chain is dominated by smallholder farmers (93%) - each with
less than a hectare of land to farm. With limited access to market and credit, millions of
smallholder farmers in Indonesia are struggling to make ends meet and are living below the
poverty line.
With limited infrastructure - especially in more rural areas - agricultural products have to go
through multiple layers of middlemen before reaching the end-consumer. As a result, farmers
rarely obtain fair prices for their harvest and consumers experience price fluctuations.
Faced with growing demand and the recent pandemic, the Government has made food
security and food sustainability a priority agenda, which includes improving agriculture
supply chain efficiency.
Market Opportunity Indonesia’s agriculture sector contributes 14% of the nation’s GDP 37
Agriculture is the country’s second biggest source of employment. An estimated 33% of the
labour force are employed by the sector38 .
Capacity: There are a number of tech-enabled emerging solutions such as:

Pipeline and Farm to table online groceries platforms that aim to connect farmers to end-consumers.
Funding Availability
Upstream solutions such as smart farming to increase the quantity and quality of products
while optimizing the human labor required.
Tech-enabled retail distribution and digital payment systems
There are also non-tech solutions such as establishing processing and production facilities in
the outskirts of agriculture areas to increase the value of smallholder farmers’ produce.
In Agroforestry (a nascent area) the availability of pipelines are still scarce. Challenges may
come when some of the enterprises are spin-off from donor programs operated by people
with low business acumen.
There are a number of maturing seed stage enterprises that are looking to unlock growth
capital.
Impact investors identified as considering the agriculture supply chain include: Patamar
Capital, C4D, Aavishkar, Garden Impact, Lonsdale Capital, Gayo Capital, UOB Venture,
Mirova, and Jupiter Impact. There are also co-investment and synergy opportunities with
mainstream investors.
Investor fit
Investors with tech or tech-enabled focus investment because the primary opportunity lies in lever-
aging digital solutions to disrupt current supply chain inefficiencies.
Investors with local team members with decision making power and presence in Indonesia,
because these emerging solutions will benefit from capability building support.
Investors looking to finance larger ticket sizes for growth stage enterprises (USD 10 million and
above). We observe that maturing pipelines are looking to scale operations from limited city cover-
age to national coverage which will require significant initial investment.
37 “Indonesia Country Fact Sheet - FAO” http://www.fao.org/3/i8881en/I8881EN.pdf Accessed 30 July.2020.

38 “Indonesia Country Fact Sheet - FAO” http://www.fao.org/3/i8881en/I8881EN.pdf Accessed 30 July.2020.
43
3.3.2 Impact Area Two: Waste and Circular Economy
Potential for Impact A 2015 study by the Environment and Forestry Ministry reported that Indonesia produces an
estimated 175,000 tons of waste daily or 64 million tons annually 39. Of this total volume, a
staggering 11% (7.04 million tonnes) is plastic waste.
81% of waste in Indonesia is unsorted and an estimated 9% of plastic waste ends up in the
nation's waterways, a figure that is projected to grow by 30% between 2017 and 2025.40 Plas-
tic waste is also burned creating toxic air pollution and contributing to respiratory problems.41
Indonesia’s Government has made tackling the nation’s waste a priority agenda, pledging to
reduce marine plastic waste by 70% by 202542 and requiring packaging producers to reduce
plastic waste production by at least 30% in 10 years43 . Local governments in Banjarmasin,
Balikpapan, Denpasar, Bogor and Jakarta now have bans on single-use plastic bags in place.44
Market Opportunity The plastic packaging industry in Indonesia is estimated at USD 9.6 Billion (2020) and is
growing at 8% annually - primarily driven primarily by increased demand in domestic FMCG,
agriculture, and automotive industries 45
Increasing awareness on the use of recycled materials among industry players, complement-
ed by establishing modern and large-scale recycling facilities to reduce dependency on
imported raw material and to respond to pressing environmental challenges imposed by
municipal waste.46
Capacity: Emerging solutions include sustainable manufacturing of recycled material and ‘green’
Pipeline and packaging. There are 12 enterprises identified that were invested between 2014-2020. 6 out
funding availability of 9 enterprise investments were made in 2019 and 2020, indicating an increase of interest
from investors.
However, despite the emergence of new plastic-free alternatives, there has been increased
concern of greenwashing due to research showing that these alternative materials may still
be sent to landfill or pollute waterways if not recycled properly.
Identified impact investors looking into the circular economy in their investment thesis
include: Gayo Capital, Garden Impact, Circulate Capital, C4D, Jupiter Impact. Circulate Capital
focuses solely on the circular economy (with Indonesia being a key market).
Most of the local recycling-focused enterprises have been operating for quite some time,
but they have limited resources and business skills to grow and scale.
Investor fit
Investors with a local presence in order to access enterprises - 9 out of 12 enterprises identified are based
outside of Jakarta.
Investors with patient capital and mindset as all enterprises identified are at pre-seed and seed stage and
are non-tech focused. The investment horizon is likely to be longer compared to more tech-focused solu-
tions.
Investors with active post-investment support as most enterprises are at an early stage and will require
more proactive hand holding.
It is strongly advisable for investors to conduct their own research on the actual product beyond market
demand to ensure its green credentials are backed by scientists and experts, given the high level of green-
washing in this sector and large number of new players interested in this area (often with good intentions but
lacking in sector knowledge).
Investors have to support data collection efforts in order to have holistic understanding of the market
because data on waste is scarce and mostly outdated.
39 “Indonesia in state of waste emergency - Jakarta Post” https://www.thejakartapost.com/news/2015/10/09/indonesia-state-waste-emergency.html Accessed 30 July. 2020.
40 “Radically Reducing Plastic Pollution in Indonesia: A Multistakeholder Action Plan - World Bank” https://globalplasticaction.org/wp-content/uploads/NPAP-In-
donesia-Multistakeholder-Action-Plan_April-2020.pdf Accessed 30 July.2020.
41 Plastic waste from Western countries is poisoning Indonesia https://www.weforum.org/agenda/2019/12/plastic-waste-indone-
sia-pollution-health/#:~:text=Indonesia%20has%20become%20a%20dumping,have%20contaminated%20Indonesia's%20food%20chain.
42 “Regions lag behind in waste management planning - Jakarta Post” https://www.thejakartapost.com/news/2019/03/05/regions-lag-behind-in-waste-management-planning.html Accessed 30
July.2020
43 Indonesia to reduce marine plastic waste 70% by 2025
https://www.aa.com.tr/en/asia-pacific/indonesia-to-reduce-marine-plastic-waste-70-by-2025/1672349. Accessed 30 July.2020.
44 “Jakarta begins new chapter in plastic waste reduction - Jakarta Post” https://www.thejakartapost.com/news/2020/07/01/jakarta-begins-new-chapter-in-plastic-waste-reduction.html Accessed 30
July.2020.
45 “Plastic Packaging Industry in Indonesia - Indonesia Packaging Federation” https://packindo.org/2019/04/08/packaging-in-indonesia/ Accessed 30 July.2020.
46 “Plastic industry in Indonesia - British Plastic Federation” http://www.bpf.co.uk/Media/Download.aspx?MediaId=2231 Accessed 30 July.2020.
44
3.3.3 Impact Area Three: Gender Lens Investing
Potential for Impact Indonesia ranked 85th out of 153 countries in the World Economic Forum’s Gender Gap
Index 2020. Despite Indonesia boasting the world’s largest share (55%) of senior and leader-
ship roles held by women, overall women’s participation in the labour force is just 54%
compared to 83.2% for men.47
Market Opportunity 50% of Indonesia SMEs are owned by women. Women also currently account for 80% of
consumption and are more often the first adopters of digital solutions.
Increasing women participation in the labour force and unlocking access to capital for
women-owned businesses can be key drivers to furthering economic growth.
Indonesia could potentially unlock an additional USD 135 billion of annual GDP (9% above
business as usual) by 2025 through advancing women’s equality 49.
Capacity: Increasing number of prospectable women-led businesses, businesses targeting women

Pipeline and consumers, and businesses aiming to increase women participation in the labour force that
is ready to be invested.
funding availability
Identified impact investors looking into and/or focusing on gender lens investing include:
Patamar Capital, C4D, Moonshot, ADB Ventures, Bamboo Capital Partners and SEAF.
There are co-investment and synergy opportunities with mainstream investors such as Teja
Ventures - the first Asian mainstream venture capital embedding the gender lens in its invest-
ment thesis.
Investor fit
Investors with gender balanced teams, especially with woman representation at senior levels. Indonesian
women entrepreneurs tend to value this factor.
Investors who reflected on their gender strategy beyond counting women entrepreneurs. As the ecosys-
tem is evolving, the investment opportunities become more demanding to capture and demand stronger
reflection (such as defining new investment instruments more suited to women entrepreneurs needs)
Investors adopting also a gender lens in their investment process, including specific gender metrics and
performance measurement at each step.
Investors with strong capacity building support pushed to their investees.
47 “Global Gender Gap Report 2020 - World Economic Forum” http://www3.weforum.org/docs/WEF_GGGR_2020.pdf accessed 30 July. 2020.
48 “Women’s Entrepreneurship Facility: Establishment of Financial Intermediary Fund” https://we-fi.org/wp-content/uploads/2018/04/We-Fi-June-7-2017-Board-paper.pdf accessed 30 July.2020.
49 “The Power of Parity: Advancing Women’s Equality in Asia Pacific. - McKinsey Global Institute” https://www.mckinsey.com/~/media/McKinsey/Featured%20In-
sights/Gender%20Equality/The%20power%20of%20parity%20Advancing%20womens%20equality%20in%20Asia%20Pacific/MGI-The-power-of-parity-Advancing-womens-equality-in-Asia-pacific-
Executive-summary.pdf. Accessed 30 July. 2020.
45
3.3.4 Impact Area Four: MSME development & digitalization
Potential for Impact 98.6% of the all MSMEs in Indonesia are micro businesses50 with a daily revenue of less than
USD 60. The majority are self-employed and their businesses have no formal establishment,
leading to specific challenges accessing finance and hindering their ability to grow.
Market Opportunity MSMEs play a vital part in Indonesia's economy, as of 2019, 64 million MSMEs in Indonesia
contribute 60% of the country’s GDP and 97% of employment.
Only 13% or 8.3 million MSMEs have capitalized on digitization. The coordinating Ministry of
Economic Affairs has set a target of 10 million by the end of 2020.51
A 2018 survey of entrepreneurs and MSME in Indonesia cited access to financing and
marketing as the most common barrier to growth (70% and 46% of respondents respectively).52
Capacity: Tech and tech-enabled solutions that are affordable for MSMEs such as:
Pipeline and Fintech lending and microloans
funding availability Increasing market access through e-commerce and online marketplaces
Mobile point of sale (POS)
Digital bookkeeping and digital payments
Logistics & warehousing platforms
Some mature enterprises have reached national scale but the majority of pipelines are still
operating with coverage limited to Jakarta and other first tier cities.
Identified impact investors looking into MSMEs development include: Patamar Capital and
Aavishkaar. There are also many co-investment & synergy opportunities with mainstream
investors who have a tech-focus.
Investor fit
Investors looking to finance growth capital and/or open to co-investment opportunities, as scaling opera-
tions to achieve national coverage will require significant capital investment.
Investors with tech or tech-enabled focus investment given the nature of emerging solutions.
39 “Over 300,000 MSMEs Go Digital amid COVID-19 Pandemic - Tempo” https://en.tempo.co/read/1356016/over-300000-msmes-go-digital-amid-covid-19-pandemic Accessed July 30. 2020.
40 “Govt aims for 10 million MSMEs to go digital by year end - Jakarta Post”
https://www.thejakartapost.com/news/2020/07/01/govt-aims-for-10-million-msmes-to-go-digital-by-year-end.html. Accessed July 30. 2020.
41 “2018 Survey of Entrepreneur and MSME in Indonesia - Asia Pacific Foundation of Canada” https://apfcanada-msme.ca/sites/default/files/2018-10/2018%20-
Survey%20of%20Entrepreneurs%20and%20MSMEs%20in%20Indonesia_0.pdf Accessed July 30. 2020.
46
2020
Indonesia
Part 4
The Impact Investing Ecosystem
Part 4: The Impact Investing Ecosystem Investing in Impact in Indonesia - 2020
4.1 Introduction
In this section we explain the roles and contributions of the key stakeholders who support impact entrepre-
neurs in Indonesia, as well as mapping how they interact with one another. In addition to stakeholders provid-
ing financial or monetary capital, we pay particular attention to those who are providing intellectual capital or
social capital.
4.2 Visualizing the ecosystem

Figure 4.1 Ecosystem mapping
DIRECT
INDIRECT
Capital Owner Intermediary Entrepreneur
Control and distribution Value-add activities
Financial Capital
(grants, loans, venture debt, quasi equity, equity)
Capital Utilization
Intellectual Capital
(knowledge, training, mentorship)
Social Capital
(access to clients, new network, awareness)
SUPPLY SIDE DEMAND SIDE
CAPITAL DISTRIBUTION
We designed this more complex framework to identify all the dynamics operating in the impact investing
ecosystem. The key players are categorized as those who distribute the capital (supply-side) - whether they
are the capital owner or intermediary - and/or those who receive and benefit from the capital (demand-side).
There are three key elements in the ecosystem mapping (Figure 4.1):
1. Types of Capital
Financial Capital
Financial capital is easily measured in terms of monetary value and is disbursed using instruments
that are often categorized according to asset classes. The common instruments found in the impact
investing market are debts, equity, and innovative financing such as venture debt53, mezzanine 54, and
quasi-equity 55.
Intellectual Capital
Intellectual capital includes any knowledge that is formally or informally transferred to entrepreneurs
through training, workshops, seminars, mentorship or sharing sessions.
Social Capital
Social capital is a non-monetary capital that relies predominantly on connections to access leaders,
investors, new markets, clients or key resources. In other words: "who you know" and "how can you
leverage these connections" to fuel your business.
53 Venture debt is a type of debt financing for early-stage companies backed by venture capital. It requires warrants of the company stock instead of collateral to compensate the lenders.
54 Mezzanine is a hybrid scheme of debt and equity, can be structured as subordinated debt or preferred equity instruments.
55 Quasi-equity or revenue participation agreement is a type of debt financing with the characteristics of equity. It may include flexible payment options or risk-sharing scheme, depending on the
future revenue stream.
48
2. Supply-side
The supply-side represents actors that channel the three types of capital to the entrepreneurs. Based on their
ownership of the capital, we divide the supply-side into two subcategories:
Capital owners include philanthropists and foundations, corporations, and individuals (HNWIs and
retail investors). They are the ultimate beneficial owners who control the capital and decide how it is
distributed. They usually have two options for distribution:
Direct distribution: Typically, direct capital distribution aims to build an impact investment
ecosystem. Instead of helping a specific pool of entrepreneurs in the demand-side, the
capital drives the activities in the ecosystem as a whole.
Indirect distribution: Capital owners distribute the capital via the intermediaries - usually to
target a more segmented types of entrepreneur.
Intermediaries source capital from capital owners, tailor the capital based on the needs of the entre-
preneurs (as the value-added activities), then facilitate the capital distribution in exchange for fees or
commission.
The idea of separating the capital owners from the intermediaries is bringing a new dimension in terms of
understanding the agenda makers in the ecosystem. Usually intermediaries, not controlling the capitals, do
not have full control over the scope of work, target market they could work with.
3. Demand-side
Demand-side represents enterprises who need capital to carry out their impact entrepreneurial activities.
They deliver impact to society through their products and/or services. Based on our research scope (see
Appendix), we recognise three groups of enterprises according to their level of involvement in delivering
impact.
Enterprises with stated impact mission and impact measurement
Enterprises invested by impact investors (coded as Social Enterprise 1)
Enterprises operating in IRIS impact categories (see appendix)
49
4.3 Ecosystem who is who

In this part, we identify some key supply-side players according to the ecosystem mapping (Figure
4.2). We group them based on their organization types, highlight their main activities when deploy-
ing the capital, identify the typical types of capital they provide, and identify some key players based
on our observation and prior interaction.
Figure 4.2 Summary of the supply-side
FC: Financial Capital
IC: Intellectual Capital
SC: Social Capital
Stakeholder Key activitie related to Type of capital Examples of key

category impact investing distributed player in Indonesia
Ministry of National Develop-

FC 60% ment Planning/Bappenas,
Ministry of Finance, Ministry of
Indonesian Government Designing and implementing policies IC 20% Cooperatives and SMEs, OJK,
SC 10% Ministry of Industry, Ministry of
Tourism and Creative Economy
FC 60%
Commissioning projects and research DFAT Australia, USAID,
Development IC 30% British Council, TPSA
Supporting the design and implemen-
institutions Canada, GIZ
tation of policies 10%
SC
FC 60% Ford Foundation,

Capital owner
Philanthropists and Commissioning projects and research Sasakawa Peace

IC 30%
foundations Participating in funds Foundation
SC 10% Tanoto Foundation, YCAB
FC 40% Salim Group, Astra, P&G,

Private corporations Providing grants and investment BCG, McKinsey,
Opening access to market IC 20%
and tech giants AWS, Gojek, Tokopedia,
Building talents SC 40% Bukalapak
FC 20%
Providing investment Angel Investors, business
Individuals IC 50%
Mentoring mentors
SC 30%
Providing investment
(debt, equity, quasi equity) The scope of this report
Impact investors, FC 70%
Providing portfolio support
venture capital firms, (operations, impact measurement) IC 20% e.g. Aavishkaar, Garden
and private equity firms Opening access to market and Impact, IIX, Moonshot
SC 10% Ventures, Teja Ventures
potential investors
Building credibility
Intermediary
Providing access to funding in FC 50%

various instruments ANGIN, Investible,
Angel investor networks IC 20%
Providing capacity building Angel Central
(feedback session, pitching training) SC 30% 00
Providing loans and equity (e.g.

FC 60%
P2P lending and working capital loan, project
Investree, Likuid, Kickstrater,
crowdfunding platforms financing, invoice financing) IC
Indogogo, Fundedhere
Helping validate the MVP
SC 40%
Raising awareness
50
Type of capital
Category Key activities (FC, IC, SC) Examples
Providing loans
Cooperatives and Opening access to supply through FC 60%
microfinance bulk buying Bina Artha Ventura, MBK
IC 10%
institutions Opening access to market Ventura, KIVA, BIDUK
Knowledge sharing with peers SC 30%
FC 90%
Providing loans
Banks Increasing credibility IC Mandiri, DBS, BCA, UOB
(e.g. through credit scoring)
SC 10%
Endeavor, Instellar, Kinara,

Developing and delivering capacity FC 10%
SIAP, SEED, UnLTD Indonesia,
Incubators and building programs
IC 50% “Nextdev ImpactAim”, Plug and
accelerators Opening access to potential
Play, Digitaraya, SKALA,Inotek,
investors, market, and partners SC 40%
Enviu
Increasing credibility B Corp, EY Entrepreneur of

Branding and raising awareness FC 40% the year, Asia Social
Awards and through publications Innovation Award, Forbes
IC 10%
competitions Providing grants 30 under 30, DBS
Providing mentorship and/or access SC 50% Foundation Grant
to mentors Programme
GIIN, ANDE, AVPN

UNDP, UNCDF
Aggregators, FC Indonesian venture capital
Convening and developing industry
networks, and and startups association
knowledge IC 30%
multilateral (AMVESINDO), Impact Hub,
Building awareness and advocacy
organizations
Intermediary
SC 70% Indonesia Social

Entrepreneurship Network
(ISEN), HIPMI
Impact-themed Palladium, Dalberg,

consulting firms and Developing best-practice FC 10% SecondMuse, Systemiq,
advisory service Conducting studies and research Social Investment Indonesia,
IC 70%
providers, impact Providing impact management PLUS, Tinkerspace, SIAP,
management services, services SC 20% SteerImpact, Artemis Impact
think tanks
FC 10% ITB, UI, Universitas Prasetiya

Conducting studies and research
Universities IC 70% Mulya, Binus University,
Building talents
UGM
SC 20%
Greenhouse, Kumpul,
BLOCK71,
FC
NGOs, communities, Opening access to market, partners, Campaign.com, KIBAR,
coworking, creative and and talents IC 30% Coworkinc, SatuTampa,
maker spaces Raising awareness Gowork,
SC 70%
Wework, Substitute
Makerspace
FC Tech in Asia, Deal Street

Media, event Asia, Daily Social, Impact
organizes, and key Raising awareness
Convening IC 30% Alpha, E27, IDF, Ideafest,
opinion leaders Kick Andy
SC 70%
51
4.4 Ecosystem evolution and key trends

Along the changes that operated for Investors (See Part 1), the overall ecosystem has seen several changes
and developments. Below is an overview of the evolution we have seen in Indonesia since 2013.
Figure 4.3 Ecosystem evolution timeline
59
NUMBER OF INTERMEDIARIES 80+
58
46
57
33
EMERGENCE PHASE ENABLING PHASE MAINSTREAMING PHASE

(2013-2015) (2016-2018) (2019-2020)
Description The discussion on social entre- The ecosystem enablers were Impact investing and social
preneurship and impact invest- growing. Impact investing and entrepreneurship are no longer
ing (also discussed as social social entrepreneurship got a niche topic - people are more
finance) emerged, but it was still more attention from the industry aware of SDGs, entrepreneurs
a niche topic among develop- players. and investors are more aware of
ment sector players and entre- sustainability and impact. Grow-
preneurs. ing interest from the general
public to understand this topic.
Key Insights Building awareness of social Growing business support from Evolution of business model
entrepreneurship model, mostly incubators and accelerators for
for nonprofits to become more early-stage entrepreneurs, but Predominant role of DFIs and
sustainable they are mostly sector-agnostic development agencies
and not exclusive for social
High tendency of talents in enterprises Rising number of intermediar-
social entrepreneurship coming ies
from development sector, Increasing network and
required more support on community support to connect Increasing theme-specific
business acumen entrepreneurs and investors support for entrepreneurs
High reliance of intermediaries Few research and public data Higher involvement of private
and entrepreneurs on grants available on impact investing corporation
from capital owners and social entrepreneurship
Decentralized support
Emerging role of “orchestrator”56
- those who mainly become a Higher awareness of impact
network builder and a capacity measurement
builder
Example of ke BCG, British Council, Ashoka, DFAT Australia, Instellar, ANGIN, Bappenas, USAID, SIAP,
players who Intellecap, AVPN, GEPI, UnLTD UNDP, PLUS, OJK, Impact Hub, Sasakawa Peace Foundation,
played in role Indonesia ANDE Ford Foundation
in the
specific phase
56 BCG 2015 “ The Art of Sustainable Giving” https://image-src.bcg.com/The-Art-of-Sustainable-Giving-May-2015_tcm93-40480.pdf

57 *Intermediaries discussed in this section exclude impact investors, venture capitals, and private equity firms
58 "Start-up Assistance Organizations in Indonesia: Taxonomy ...." https://www.spf.org/en/gender/publications/24911.html. Accessed 27 Jul. 2020.
59 ibid.
52
4.5 Key insights

As we did for the previous parts, we are here covering several key insights and trends we identified through
our research
4.5.1 From “beneficiary” to “customer”

To develop the Indonesian impact ecosystem, the capital owners initially worked with intermediaries to bring
financial, intellectual and social capital to entrepreneurs. In other words intermediaries were highly depen-
dent on capital owners, such as, donors and development institutions to operate. This capital was mostly
provided free of charge as entrepreneurs were not charged for the services they were benefiting from.
In the mainstreaming phase of the ecosystem, we have seen the emergence of two new dynamics :
Entrepreneurs are not considered as beneficiaries anymore but intermediaries are starting to charge
entrepreneurs and consider them as consumers or customers of advisory services. Products are
provided for a charge.
There is also a shifting mindset of intermediaries, related to the evolution of the business model as
capital from development institutions is becoming harder to access. Intermediaries previously deter-
mined success according to their ability to answer grant proposals to get funded for their activities in
supporting entrepreneurs. Whereas nowadays, intermediaries act as capital owners who have more
control on the capital. As they are no longer relying on grants, these intermediaries are driven by the
ability to sell services and gain customers, in this case the entrepreneurs.
Figure 4.4 Evolution of the capital owners’ business model
“Free capital” (before 2018) Monetization (2018 onwards)
Drivers Increased flows of aid and development capital Decrease of development aid capital
Desire of capital owners to develop ecosystem Avoid market distortion
Aid/development legal constraints Fierce intermediary competition for capital
Lack of entrepreneurs’ capacity to pay for Desire of intermediaries to be self sustaining and
support services diversify revenue streams
Lack of entrepreneurs’ capacity to increase the Educate entrepreneurs on value of support
value of their capital assets (valorisation)
53
4.5.2 The role of DFIs and development aid agencies

Development Financial Institutions (DFI) and development aid agencies have been historically very active in
supporting Indonesia and provided the original source of impact investment capital in the country. Based
on our data (see 1.4.9), public funding has deployed approximately USD 100 million to back impact investing
60
in Indonesia.
Development aid agencies have also played a significant role in shaping the impact investing ecosystem
in Indonesia through commissioning research projects and conducting capacity building programs, such
as DFAT’s “Investing in women” initiative, British Council’s “Developing Inclusive and Creative Economies
(DICE)” programme and USAID’s “Kunci” initiative in supporting entrepreneurship in marginalized youth.
These actions enabled the growth of various intermediaries by highlighting certain important topics, inviting
and/or supporting new parties to join the field, and enabling collaboration within the field.
Although Indonesia is now classified as an upper-middle income country , we believe that DFIs and devel-
opment aid agencies will remain a key player due to both (a) the scale and 61 significance of Indonesia as the
largest country in Southeast Asia, and the (b) the challenge the country faces in achieving certain SDGs .
62
However, due to increasing activity from impact investors the DFIs and development aid agencies will no
longer be the sole major driving force in the impact investing field in Indonesia.
Additionally, as signaled by the initiation of the DFI Working Group on Blended Finance in 2017 that is chaired
by IFC - the largest DFI player in Indonesia in terms of capital deployed - we expect that the DFIs and devel-
opment aid agencies will take more action to promote collaboration and cooperation between develop-
ment institutions, private investors, and social entrepreneurs (e.g. DFAT is backing several gender lens invest-
ment funds and USAID has launched “Green Invest Asia” initiative).
60 Capital deployed by government agencies and development institutions were approximately USD 300 million in total, with the estimation of 30% allocation to Indonesia.
61 Indonesia is ranked 100th out of 166 countries in terms of SDG Index scores in 2020. (2020, July 1). New World Bank country classifications by income level: 2020 .... Retrieved July 25, 2020,
from https://blogs.worldbank.org/opendata/new-world-bank-country-classifications-income-level-2020-2021
62 "The Sustainable Development Report 2020 - Amazon S3." https://s3.amazonaws.com/sustainabledevelopment.report/2020/2020_sustainable_development_report.pdf. Accessed 25 Jul.
2020.
54
4.5.3 The rise of intermediaries

The increasing emergence of social enterprises and capacity needs in Indonesia has allowed intermediaries
to thrive. As an example, incubators and accelerators have increased in number from three in 2010 to 46 in
201863.
We identified more than 80 active non-fund manager intermediaries focused on social enterprises as of
2020 (Refer to Figure 4.3).
Figure 4.5 Example of different types of intermediaries
Name Type Activities
Designed and implement capacity building services to entrepreneurs

ANGIN Advisory Advisory and connect them to capital
Has mentored 450 impact-driven founders and incubated 173 social

SIAP Social business incubator enterprises since its inception. (as of Aug. 2020)
Tinkerspace for Specializes in providing brand and management consulting services to

Advisory social enterprises in Bali
Social Enterprise
The growth of intermediaries have brought both opportunities and challenges to the impact investing scene
in Indonesia as below.
Opportunities Details
The last generation of intermediaries in the impact investing ecosystem has brought new
New value propositions value-adding activities. Together, they accommodate a greater transfer of various types of
capital between the capital owners and the entrepreneurs.
Local intermediaries matured and gained experience from executing projects, the pioneering
intermediaries built track records that serve as pathways to an accelerated learning curve for
Learning curve building the new joining intermediaries. This allows new intermediaries to improve their service at a
faster rate initially.
Acknowledging the various social and environmental challenges that exist in Indonesia, the
Movement towards emerging intermediaries in the field have shown their support by incorporating the consider-
sustainability ation for these issues to the service that they provide to their clients / beneficiaries.
Capital owners outside of Indonesia often have to go through a lengthened supply chain
involving various intermediaries to obtain a good level of local information in their pre-invest-
ment research. For example:
Prolonged value chains Capital owner Development aid agencies (or other intermediaries) headquarter in
their respective countries Agencies (or intermediaries) branch in Indonesia
Research Institution in Jakarta or other big cities Various local intermediaries that
will support the main research institution in collecting local data.
Capital owners who have worked with certain intermediaries and valued their service tend to
Over-dependence by retain their service, often without considering the service of other potential intermediaries.
capital owners This led to overdependence on certain intermediaries which might lead to operation issues,
in case those intermediaries do not have enough capacity to accomodate all of the capital
owners’ requests.
The growing environment of impact investment in Indonesia has attracted the presence of
Foreign competition larger, global intermediaries to build their footprint in Indonesia. While this situation in itself is
not necessarily an issue, their dominance in the field might hinder the development of
smaller local intermediaries.
The value added-activities provided by the intermediaries come with their own costs, wheth-
Increase cost er in terms of time, manpower, or financial resources. As talents are still quite scarce within
the talent pool of the intermediaries, the personnel costs can be driven to unsustainable
levels, especially when foreign capital owners are involved. Often dubbed as “aid inflation”,
foreign capital owners from developed countries sometimes pay for the service of intermedi-
aries and their personnel based on the rate of their own countries which is much higher than
the normal Indonesian market rate. This results on a skewed expectation of average market
rate for the services that the intermediaries are providing.
63 "Start-up Assistance Organizations in Indonesia: Taxonomy ...." https://www.spf.org/en/gender/publications/24911.html. Accessed 27 Jul. 2020.
55
4.5.4 The rise of support on emerging themes: Gender and climate

During the emergence phase of impact investing in Indonesia (2013-15) the number of intermediaries were
lower but the types of entrepreneurs they served were greater. For example, incubator programs were sector
agnostic, meaning they were open for any entrepreneurs operating in any sector and focusing on any theme.
Over time, capital owners and intermediaries have begun to focus on specific areas of impact, particularly
recently around gender issues and climate (See Figure 4.6).
The growth of theme-specific support from intermediaries is both demand-driven (indicating a sufficient pool
of investible entrepreneurs for capital owners) and supply-driven ( pushed by capital owners).
Figure 4.6 Summary of support on the emerging themes
Emerging themes Intermediary category Theme-specific support Examples in Indonesia
Gender, mostly P2P lending and crowdfunding Financial capital for Amartha
focusing on women platforms women-owned and -led SMEs Kokowa Gayo
empowerment BIDUK
Cooperatives and microfinance
institutions
Incubators and accelerators Capacity building for Womenwill Indonesia

women-owned and -led SMEs Simona Ventures by Digitaraya
Competition and awards Initiatives for increasing She Loves Tech

women’s participation in tech
entrepreneurship
Communities, network Mentorship from women, for WomenWorks, Femme in STEM

women
Climate (including Incubators and accelerators Capacity building and incubation Ocean Plastic Prevention
circular economy, program for climate-related Accelerator (OPPA)
waste manage- SMEs SEED
ment, sustainable
farming and Communities, network Resources centre and training PUPUK
forestry) for climate-related SMEs
56
4.5.5 Involvement of private corporations

Historically, corporations' social responsibility (CSR) activities have mostly involved through grants, donations
or other philanthropic activities. Nowadays, sustainability and social responsibility are increasingly
recognised as being core to their business and bottom line. As a result, corporate strategies are evolving as
part of the “Creating Shared Value” movement 64, defined as: “corporate policies and practices that enhance
the competitive advantage and profitability of the company while simultaneously advancing social and
economic conditions”.
One way of creating shared value is for corporations to engage with social entrepreneurs. We identify four
types of partnerships between corporations and social enterprises65 (see Figure 4.7).
Figure 4.7 Partnerships between corporations and social enterprises
Type of Support offered to

partnership social enterprises and entrepreneurs Corporate objectives Examples in indonesia
Skill sharing Corporate employees provide Help develop leadership skills BCG Give Back
pro-bono mentoring, coaching and entrepreneurial mindset in EY Entrepreneurial Winning
and informal advice the participating employees, Women Indonesia
whilst increasing job satisfaction
and staff retention
Incubation, Early-stage investment, training, Invest capital to get both social Gojek partnership with
investment and technical expertise, and access and financial return Digitaraya to create startup
corporate social to networks to help new enter- Improving business perfor- accelerator program
venturing prises manage their risks and mance through developing Corporate LPs investing in
scale up their businesses and integrating innovations by Circulate Capital funds
the enterprises into the core
business of the corporation
Supply chain Entering a business relationship Reduce risk and improve Barito Pacific and Michelin
collaboration with social enterprises (as suppli- sustainability of the supply joint venture in PT RLU to
ers/buyers/intermediaries) to chain supply sustainable rubber for
build sustainable and responsi- Develop distribution networks tire production
ble supply chains and value to access new markets or Vasham supplies corn from
chains improve access to current local farmers to Japfa in an
markets integrated, end-to-end cycle
Strategic Sponsoring programs of Convert resources into quantifi- DBS Foundation Social Enter-
sponsorship research/innovation, often able social impact through a prise Grant
through intermediary, to support portfolio of ‘lighter’ strategic Astra Digital, a subsidiary of
the development of social entre- partnerships with social enter- Astra Group, sponsoring Plug
preneurship prises & Play
As the number and activities of social enterprises in Indonesia increase and bring new business opportunities
and innovations, we expect that corporations will gradually shift from older philanthropic mindsets towards
that practice of creating shared value. We will see more advanced types of partnerships with social enterpris-
es such as corporate social venturing and supply chain collaborations. This will not only help develop the
social entrepreneurship scene but will also, ultimately, improve the performance and sustainability of main-
stream corporations.
64 "Creating Shared Value - Institute For Strategy And ...." 11 Dec. 2015, https://www.isc.hbs.edu/creating-shared-value/Pages/default.aspx. Accessed 25 Jul. 2020.
65 "howcorporates can engage with social entrepreneurs." https://static1.squarespace.com/sta-
ic/56d2eebbb654f9329ddbd20e/t/58cef9cd17bffcb09bcdd777/1489959379700/Corporates+engaging+with+social+ventures+UnLtd.pdf. Accessed 25 Jul. 2020.
57
4.5.6 Decentralized support: going outside Jakarta and Java

The ecosystem is starting to decentralize as entrepreneurial support systems develop beyond Jakarta and
Java’s largest cities. This should strengthen community resilience through developing innovation and local
solutions in response to local needs. Notably, this trend of decentralized support is mostly focused on provid-
ing intellectual and social capital in order to build the pipeline for investors and prepare local entrepreneurs
to tap the capital available. Below are some examples of decentralization:
Figure 4.8 Example of decentralized support
Organization Activity Some target areas
Platform Usaha Sosial Initiating community-led local chapters to provide support Outside Jakarta
(PLUS) to local entrepreneurs
Satu Tampa Providing digital startup community hub Eastern Indonesia
Running accelerator programs for early-stage social entre- Jakarta, Solo, Malang, and
Tinkerspace for preneurs that is funded by the British Council initiative Makassar
Social Enterprise known as Developing Inclusive and Creative Economies
(DICE)
Providing advisory support and acting as a community Bali
TInkerspace
network for women and social entrepreneurs
Koperasi Kopi Facilitating women coffee farmers Aceh

Wanita Gayo
(Kokowa Gayo)
ANGIN Providing capacity building for women entrepreneurs Lombok and Maluku
Conducting series of program as part of a global initiative to 11 cities across Indonesia including
Startup Weekend
develop the digital entrepreneurship ecosystem Lombok, Makassar, Pontianak
The urge to bring entrepreneurial support to these areas is increasing due to the COVID-19 pandemic. For
example, the Bank of Indonesia in Maluku and ANGIN are currently collaborating to provide capacity building
in digitizing SMEs in Ambon.
58
2020
Indonesia
Part 5
Policy and regulation
Part 5: Policy and regulation Investing in Impact in Indonesia - 2020
5.1 Government intervention evolution since 2013

The Indonesian Government has shown signs of initiatives to recognize the potential of social enterprises in
building solutions to address some of the country's key social and environmental challenges. This also
indicates that the Government is progressively shifting from relying only on charitable or international contri-
butions to create systemic solutions. Below is how the involvement of the Indonesian government has
followed the different phases of the ecosystem development.
Figure 4.1 Evolution of government intervention
Emergence Phase Enabling Phase Mainstreaming Phase

(2013-2015) (2016-2018) (2019-2020)
Description Government initiating Increased number of consulta- Specific topics being discussed
awareness and early dialogue tions led by Government with (e.g. blended finance, fintech
private sectors for impact, gender lens
Development of “lobbying” investment)
institutions to push the agenda Involvement of INGO and
Increased number of direct
of social entrepreneurship multilaterals to develop policies
interventions
Key events Launch of OJK regulation on 1000 Digital Startups, Indonesia Development Forum
Venture Capital Bekraf for Pre-Startup (BEKUP), (IDF)
Nexticorn
Series of OJK programs on SDGs Annual Conference
Annual Islamic Finance
financial inclusion (Laku Pandai, Conference Startup 4 Industry
microfinance) Launch of sovereign green Archipelagic Island States (AIS)
bonds Forum
Launch of OJK regulation on
fintech
Example of key OJK BEKRAF Ministry of National Develop-

public leaders Ministry of Finance ment Planning/Bappenas
Ministry of Communication and OJK
Informatics Ministry of Finance
Ministry of Cooperatives and
SMEs
Ministry of Industry
Coordinating Ministry for
Maritime and Investment
Affairs
Example of key ADB UNDP UNESCAP

supporters USAID UNCDF DFAT
AVPN
5.2 Locating policies and recommendations in

impact investment market
Formulating national Impact Investment and social entrepreneurship strategy
Demand-side/entrepreneur
Type Supply-side/capital development Ecosystem
development
Government Improving access to early stage Promoting impact investment Creating social entrepreneur-
influence and and growth capital in impact and social entrepreneurship ship education, mindset and
direct ecosystem, awareness and skills development to develop
involvement Optimizing the regulatory networking more impact entrepreneurs
environment
Optimizing the regulatory
environment
60
5.3 Key policy leaders

Leader Supply-side/capital development Ecosystem
development
OJK Development of the PMV (PT Set up National Strategy of Laku Pandai Program: (Branch-
Modal Ventura) license for fund Financial Inclusion (SNKI) which less banking under financial
managers to set up local fund has a target to include 75%67 inclusion framework) - 275k
structure Indonesian adult population to registered agents and 3.8
financial services from formal million customers
Supporting the plan to issue institutions. This strategic
“social finance investment initiative will include all stake- Jaring Program: Initiatives to
funds” and “social impact bonds”66 holders including public and support the maritime industry
private sectors
The Ministry of Pioneering capital deployment Create an SDG financing hub to In Indonesia Development
National from private sectors, while coordinate and match SDG Forum 2019, an international
Development ensuring adequate return, to related financing projects conference by Bappenas,
Planning SDG financing through various outside of the national budget. social enterprise was one of
(BAPPENAS) measures. Bappenas plan to (i.e. Philanthropy, Zakat, CSR) 69 the topics discussed and
attract up to 38% private partici- passed to policy makers 70
pation during 2020-2024 68
Bappenas also included a
strategy for social enterprise
development in their medium
71
term development plan in 2015
The Ministry of New investment regulations Waiver of USD 170 notarial deed Capacity building for 8,790
Co-operatives (through partnership schemes) fees for 1,000 micro co-opera- entrepreneurs (including
and Small and for MSME are regulated under tives in 2017 72 techno and social entrepre-
Medium the soon to be ratified Omnibus neurs) in 2019 73
Enterprises Law
Ministry of N/A Nexticorn initiatives: Platform to 1000 digital startup initiatives:

Telecommunica- streamline and promote Indone- to promote digital adaptation
tion sia's most investable startup to and innovation for local enter-
investors prises
The Coordinat- Issued Green Bond and Sukuk N/A N/A

ing Ministry of (Islamic Bond) amounting to USD
Economic 1.25 Billion to support Indonesia
Affairs emission reduction goal to select
eligible green projects
BKPM Targeting Indonesia to achieve N/A N/A

top 50 countries in Ease of
Doing Business. As per 2020,
Indonesia sits on level 73 from
190 countries to attract foreign
capital
BEKRAF N/A N/A Partner with UNDP to create

Youth: Co-Lab Indonesia, a
platform for innovation and
training for youth-led social
entrepreneurship and startups 74
The Ministry of N/A N/A In 2013, cooperation with Bina
Trade Swadaya to award social entre-
preneurs to promote them to
the general public 75
66 https://www.ojk.go.id/id/berita-dan-kegiatan/siaran-pers/Pages/OJK-Dorong-Pembiayaan-Program-Social-Finance.aspx
67 https://www.ojk.go.id/en/berita-dan-kegiatan/siaran-pers/Doc-
uments/Pages/Press-Release-OJK-Supports-Financial-Inclusion-Activities-to-Implement-Financial-Inclusion-National-Strategy/sp-ojk-support-financial-inclusion.pdf
68 https://investor.id/business/bappenas-siapkan-3-skenario-atasi-kekurangan-pembiayaan-sdgs
69 https://www.medcom.id/ekonomi/mikro/nN9wYM9k-bappenas-bentuk-sdgs-financing-hub
70 https://www.bappenas.go.id/id/berita-dan-siaran-pers/idf-2019-modernisasi-umkm-atasi-permasalahan-masyarakat-bantu-perekonomian-nasional/
71 https://www.britishcouncil.org/sites/default/files/the_state_of_social_enterprise_in_indonesia_british_council_web_final_0.pdf
72 https://kabarbisnis.com/read/2873550/kemenkop-ukm-fasilitasi-pengesahan-1-000-akta-koperasi-mikro-secara-gratis
73 https://www.wartaekonomi.co.id/read214081/alokasikan-rp200-miliar-untuk-kewirausahaan-ini-program-kemenkop-dan-ukm
74 https://www.id.undp.org/content/indonesia/en/home/presscenter/pressreleases/2018/9/undp-indonesia-and-bekraf-join-forces-to-boost-youth-participati.html
75 http://www.kusalaswadaya.org/index.php/tentang-kusala-swadaya
61
Policies specific to the certain areas of impact

Focus Supply-side/capital development Ecosystem
development
SME New, simpler regulation to N/A Supportive and relaxed

development invest in SME will be ratified regulation for SME (lower tax
under the new omnibus law rate and easier registration
process)
OJK licensed for P2P lending
company has increased the One gate policy by ministry of
amount of SME financing by cooperatives and SME (previ-
institutional and retail investor ously it was under 18 different
76
ministries)
Supply chain Increasing foreign maximum N/A N/A
ownership in the logistic sector
from 67% to 100%, leading to
11% increased in investment 77
Government’s Goods/Services
Procurement Policy Agency
(LKPP) updated the new
government procurement to
consider sustainability aspects
including economic, social,
and environmental aspects78
Circular POJK 51/2017 for implementa- N/A Government is implementing

economy tion of sustainable financing for green public procurement to
financial institutions and public- increase supply of sustainable
ly listed companies products
Agricultural BKPM will deregulate 141 law The ministry of agriculture set President mission towards
which deter investment in up an “Agriculture War Room” sustainable agriculture with
agribusiness sector 79 for both entrepreneurs and food security and farmer
investors to make a better welfare as the end goal
agricultural related decision
Forestry USD 125 billion of green bond The ministry of environmental The ministry of environmental
issued by the ministry of and forestry are looking to and forestry are introducing
finance increase investment and four new forestry categoriza-
productivity in forestry in tion schemes which incorpo-
80
2020-2024 through various rate local citizen and small
measures holders entrepreneurs for
greater benefit
There are 12.7 million

hectares of “social forest”.
The ministry of cooperatives
and SME have utilized 4
million hectares to give
economic benefit to the
general public
76 https://investor.id/business/pemerintah-buat-kebijakan-satu-pintu-untuk-umkm
77 https://ekonomi.bisnis.com/read/20190814/98/1136486/semester-i2019-investasi-logistik-jadi-primadona
78 https://indonesiadevelopmentforum.com/2020/article/15377-selected-speaker-for-idf-2019-febe-amelia-proposes-social-procurement-to-enhance-the-impact-of-social-enterprises
79 https://www.bkpm.go.id/id/publikasi/detail/berita/regulasi-agribisnis-141-aturan-akan-dideregulasi
80 https://ekonomi.bisnis.com/read/20200106/99/1187280/kinerja-sektor-kehutanan-bakal-dipacu-dalam-4-tahun-ke-depan
62
5.4 Recommendation
While the report is not meant to focus on the policy side, we believe our interviews and the data that we
collected support the development of several recommendations for policy leaders in Indonesia. Below are
some of our recommendations for action. Note that some of these recommendations have already been
implemented over the last two years (highlighted in green).
A) Formulating national Impact Investment and social entrepreneurship strategy
Objectives Recommendations
Identify Indonesia Map the current status of social entrepreneurship and impact investment in Indonesia
specific challenges Identify Indonesia-specific entrepreneurship opportunities and challenges
Specify goals and Define strategies to achieve specific goals and reach specific target groups
set priorities Develop and prioritize actions
Ensure coherence of Align social entrepreneurship strategies with overall development strategy and other
entrepreneurship strategy private sector development strategies
with other national policies Manage interaction and create policy synergies
Designate a (or several) leading institution

Strengthen the institutional
Set up an effective inter-agency coordination mechanism and clarify mandates
framework
Engage with the private sector and other stakeholders
Define clear performance indicators and monitor impact

Measure results,
Set up independent monitoring and evaluation routines
ensure policy learning
Incorporate feedback from lessons learnt
B) Promoting social entrepreneurship ecosystem awareness and networking
Identify Indonesia Map the current status of social entrepreneurship and impact investment in Indonesia
specific challenges Identify Indonesia-specific entrepreneurship opportunities and challenges
Specify goals and Define strategies to achieve specific goals and reach specific target groups
set priorities Develop and prioritize actions
Ensure coherence of Align social entrepreneurship strategies with overall development strategy and other
entrepreneurship strategy private sector development strategies
with other national policies Manage interaction and create policy synergies
Designate a (or several) leading institution

Strengthen the institutional
Set up an effective inter-agency coordination mechanism and clarify mandates
framework
Engage with the private sector and other stakeholders
Define clear performance indicators and monitor impact

Measure results,
Set up independent monitoring and evaluation routines
ensure policy learning
Incorporate feedback from lessons learnt
63
C) Improving access to early stage and growth capital
Create innovate pools of Develop an angel network or national early stage impact investment fund
funding for social innovation
Seed/invest (fund of fund) in existing investment vehicles catered to impact investment
(building the supply)
Develop public credit guarantee schemes

Improve access to relevant Facilitate the use of new schemes as collateral (e.g. IP, called movable assets)
financial services on
Facilitate collateral-free loan screening mechanisms
appropriate terms
Encourage performance-based loans and incentives for innovation
Promote funding for social Provide incentives to attract, financial technologies (fintech), impact investors, venture
innovation capital investors and angels investors
Establish a national impact investment association (similar to the Association of fintech

organizations)
Build the capacity of the
financial sector to serve social Promote public-private sector "access to impact investment partnerships" for specific
entrepreneurs groups
Provide capacity-building grants and technical assistance to expand impact investment
activities (especially of local fund managers) or lending to social entrepreneurs
Provide financial literacy

Set up financial and accounting literacy trainings
training to entrepreneurs and
encourage responsible Undertake appropriate supervision of financial products offered to social entrepreneurs
borrowing and lending (especially the earlier stage ones)
D) Optimizing the regulatory environment

Examine regulatory require- Benchmark time and cost of starting a business

ments for social entrepreneurs Benchmark sector- and region-specific regulations
and impact investors Set up public-private dialogue on regulatory costs and benefits
Reduce regulatory requirements (e.g. licenses, procedures, administrative fees)
Minimize regulatory hurdles Introduce transparent information and fast-track mechanisms and one-stop-shops to
for social entrepreneurs where bundle procedures
appropriate
Enhance technology based procedures for business registration and reporting
Ensure good governance
Build social entrepreneurs’ Make contract enforcement easier and faster
confidence in the regulatory Establish alternative conflict resolution mechanisms
environment Guarantee IP protection
Reduce the bankruptcy stigma and facilitate re-starts
Guide entrepreneurs through Carry out information campaigns on regulatory requirements

the business administrative Make explicit the link between regulatory requirements and public services, including
process and enhance the business support services
benefits of formalization Assist social entrepreneurs in meeting regulatory requirements
64
E) Creating social entrepreneurship education, mindset and skills development
Mainstream the development of social entrepreneurship awareness and entrepreneurial

behaviours starting from primary school level (e.g., risk taking, teamwork behaviours, etc.)
Promote social entrepreneurship through electives, extra curricular activities, career
Embed entrepreneurship in awareness seminars and visits to businesses at secondary school level
formal and informal education Support entrepreneurship courses, programmes and chairs at higher education institu-
tions and universities (example of certain school in Asia such as NUS or INSEAD)
Promote vocational training and apprenticeship programmes
Promote and link up with entrepreneurship training centres
Prepare social entrepreneurial skills education material

Develop effective Encourage tailored local material, case studies and role models
entrepreneurship curricula Push interactive and on-line tools
Promote experiential and learning- by- doing methodologies
Ensure teachers engage with the private sector and with social entrepreneurs and
support initiatives that bring social entrepreneurs to educational institutions
Train teachers
Encourage social entrepreneurship training for teachers
Promote social entrepreneurship educators’ networks
Encourage private sector sponsorship for social entrepreneurship training and skill
development
Partner with the private sector Link up business with entrepreneurship education networks
Develop mentoring programmes for social entrepreneurs
Build networks in knowledge intensive sectors with leading experts and academics
around the world
65
2020
Indonesia
Part 6
Zooming in on COVID-19 impacts
Part 6: Zooming in on COVID-19 impacts Investing in Impact in Indonesia - 2020
6.1 Introduction
Due to the COVID-19 pandemic, Indonesian GDP growth for Q2 2020 contracted by 3.8% and may shrink by
81
a further 1% in Q3 . According to INDEF, the pandemic may lead to a loss of value in investment in Indonesia
82
as large as IDR 127 trillion (USD 9 billion). Aviation, travel/tourism, and retail are amongst the sectors hit hard-
83
est by the pandemic.
According to a YouthColab Survey in Indonesia, 79% of youth social entrepreneurs believe that the
pandemic has negatively impacted their business, with 45% of respondents attributing this to less demand
or restrictions on conducting transactions due to social distancing.84
We started the report before the large impact of COVID-19 affected the global economy. Indonesia was one
of the latest countries in Southeast Asia to be constrained by large social restrictions. While not being at the
heart of the analysis (the impact of Covid-19 deserves a dedicated analysis by itself), we believe that some
highlights on the impact of the pandemic on both entrepreneurs and investors would trigger an element of
information for our audience.
6.2 The impact of COVID-19 on demand-side of

impact investment
Social entrepreneurs, similar to mainstream enterprises, have experienced significant challenges to maintain
stability in their value chains. As a result, many have responded by pivoting their business channel, making
cuts in human resources, or changing their long term strategy due to lack of financing.
Figure 6.1 Example of impact of Covid-19 in value chain of social enterprise
Category Examples Response
A food retail operator experienced 90%

The company started to pivot to online sales and
Sales and Distribution sales decrease due to limitation in operating
de-prioritize its physical restaurant business line.
physical restaurant
A sustainable seafood product producer had

Human Resource to stop the operation of one of its integrated The site is currently not being operated by still
and Workforce fisheries facilities due to outbreak of maintained to enable efficient start at re-opening.
COVID-19 in the site
Another sustainable seafood product export-
er is having difficulty in fulfilling its short-term The company is delaying or cutting the salary or
Working Capital & working capital needs due to the lack imme-
Short-term Financing bonus payment to its workers.
diate of financial resources that are usually
covered by ongoing sales
A social enterprise had the signing of their The company has to reshape their financing and
Capex and term sheet for a Series A investment capex strategy due to inability to finance the
Long-term Financing cancelled last minute due to the change of purchase of new equipment. This unfortunately
mindset of their potential investors also results in their production capacity being
limited.
81 "Indonesia's economy could enter recession in Q3: Sri Mulyani ...." 10 Jul. 2020, https://www.thejakartapost.com/news/2020/07/10/indone-
sias-economy-could-enter-recession-in-q3-sri-mulyani.html. Accessed 28 Jul. 2020.
82 “The Covid-19 Impacts on Investment in Indonesia - BKPM”
https://www.investindonesia.go.id/en/article-investment/detail/the-covid-19-impacts-on-investment-in-indonesia. Accessed 27 July 2020.
83 "COVID-19 impacts across Indonesia's business sectors: A recap."
https://www.thejakartapost.com/news/2020/03/30/covid-19-impacts-across-indonesias-business-sectors-a-recap.html. Accessed 28 Jul. 2020.
84 "Impact of COVID-19 on Youth Entrepreneurs | UNDP in ...." 7 Jul. 2020,
https://www.id.undp.org/content/indonesia/en/home/library/Impact-of-COVID-19-on-Youth-Entrepreneurs.html. Accessed 29 Jul. 2020.
67
We observed that whether or not the business is related to human ‘primary needs’ (food, health, educa-
tion etc.) serves as an important factor in its ability to succeed in the era of ‘new normal’ society.
While, it is true that being tech-enabled or online-based will give a company an advantage compared to com-
petitors in the same industry, if it does not operate in ‘primary needs’ related business, it will likely still experi-
ence negative impact from the pandemic. This is mainly due to the fact that many end-consumers are experi-
encing decline in their incomes and have less-than-optimistic expectations about their future financial
prospects and will reduce their consumption of ‘non-primary goods’ in the short term.
However, the impact of technology should not be dismissed. We have seen many businesses that were
previously less tech-enabled moving to implement more technology and online-based transactions in
their business model in order to survive this pandemic. We believe that the shift for businesses to become
more tech-enabled will have a long lasting effect.
Factors NEGATIVELY IMPACTED POSITIVELY IMPACTED
Business model Non-tech-enabled Tech-enabled
Nature of product Non-primary needs Primary needs
Additionally, the impact of COVID-19 on social entrepreneurs is presented according to our four main invest-
ment opportunity areas we identify in Indonesia (see Part 3), specifically: agriculture supply chain efficiency,
waste and circular economy, gender lens investing and MSMEs development.
6.2.1 Agriculture supply chain efficiency

Agriculture, the second largest contributor to Indonesia’s economy, has proven to be the country’s support-
ing pillar during the pandemic crises. In the second quarter of 2020, the sector managed to grow 2.19 % when
compared to the same quarter last year 85. This is mainly due to the fact that the Government has made access
to food a priority during the crisis and permitted agricultural logistics to be exempted from large-scale social
restrictions. Therefore, despite some price volatility 86, food supply has generally been stable and so far short-
ages have been avoided.
Indonesian SMEs and other businesses in this impact area have been affected in the following ways:
Indonesian agrifood e-commerce platforms such as Sayurbox and AgRetail.id have actually report-
ed an improvement in sales87 - largely as a consequence of social restrictions that have prevented
consumers from shopping in supermarkets or crowded markets. Furthermore, AgRetail, which is a
part of Inacom (the country’s biggest platform end-to-end agro commodities), has announced busi-
ness expansion outside of Jakarta to several cities in Indonesia88 .
Processing and production facilities of agriculture products are allowed to operate but must follow
stricter hygiene requirements. In addition, social distancing is likely to reduce the level of workforce
and capacity utilisation, as well as hindering their supply chain process in the long run.
85 "Agriculture resilient to pandemic's impact - The Jakarta Post." https://www.thejakartapost.com/news/2020/08/08/agriculture-resilient-to-pandemics-impact.html. Accessed 11 Aug. 2020.
86 "Mitigating Food Supply Chain Disruptions Amid Covid-19." 13 May. 2020, https://www.cips-indonesia.org/post/policy-brief-mitigating-food-supply-chain-disruptions-amid-covid-19. Accessed 11
Aug. 2020.
87 "5 Southeast Asia's Business Sectors Thriving in the COVID-19 ...." https://greenhouse.co/blog/5-southeast-asias-business-sectors-thriving-in-the-covid19-pandemic/. Accessed 11 Aug. 2020.
88 "Menjadi Bagian dari Pejuang Pangan Ditengah Badai Pandemi." 28 Apr. 2020, https://inacom.id/news/view/2020-04-28-menjadi-bagian-dari-pejuang-pangan-ditengah-badai-pandemi.
68
6.2.2 Waste and circular economy

Despite the increase in household waste and medical waste due to the pandemic89, waste facilities and waste
banks in Indonesia are experiencing decreased demand for recyclable materials from factories producing
consumer products. This is partly due to the slump in oil price, which also lowered the cost of virgin plastics
(a direct competitor of recycled plastics). The crisis has hit the plastic recycling industry hard, with production
capacity utilization reaching no more than 30-40% 90 - leading to some 63,000 formal workers being
furloughed and reducing income of over 3.7 million waste pickers91.
As supply chains of many industries are disrupted, the notion of circular economy has become much more
important and has featured prominently in conversations around “Building Back Better”92. Circular economy
is a means to increase individual and community resilience. The crisis presents opportunities for impact
investors and entrepreneurs to reshape current systems to become more environmentally conscious and
responsible than before.
Indonesian SMEs and other businesses in this impact area have been affected in the following ways:
Online-based waste consolidators and recyclers are seeing an upsurge of users as people look for
ways to increase their income amidst the declining economy. For example, MallSampah93 has report-
ed a large increase in user numbers and Mountrash94, a similar company, has introduced the option
to exchange the collected waste for internet data to help users cope with the social distancing policy.
Non-tech enabled businesses such as recycling facilities are suspending a large part of their
operations due to decreased demand. Increase in medical waste has also exposed workers to addi-
tional risk and created heightened the demand for improving hygiene in their operations.
6.2.3 Gender lens investment

In Indonesia, women have been particularly vulnerable to the negative impacts of this pandemic. In many
respects, the COVID-19 pandemic is amplifying pre-existing gender differences95. For example:
Indonesia is already far behind its neighbours on women’s participation in the labour force. Due to
COVID-19, women are experiencing a significantly increased burden on their time given multiple
responsibilities - particularly in light of continued school closures - and this could likely lead to reduc-
tions in working time and even permanent exit from the labour market.
Women tend to be over-represented in the occupations and industries that have been hardest hit in
Indonesia (retail, textiles, leisure, tourism)96 .
A larger share of women are family caregivers and domestic workers, or work in the health sector
and in client-facing roles which increases their levels of exposure to the virus.
The redirection of government resources in the pandemic response is likely to shift funding away
from reproductive and sexual health services.
89 "The amount of household plastic waste and medical waste ...." 8 Jun. 2020, https://www.idnfinancials.com/news/34596/household-plastic-waste-medical-waste-increase-covid-pandemic.
90 "Industri daur ulang plastik rumahkan 63.000 pekerja akibat ...." 5 May. 2020, https://www.antaranews.com/berita/1467057/indus-
tri-daur-ulang-plastik-rumahkan-63000-pekerja-akibat-covid-19. Accessed 11 Aug. 2020.
91 "Plastic in the time of a pandemic: protector or polluter? | World ...." 6 May. 2020, https://www.weforum.org/agenda/2020/05/plastic-pollu-
tion-waste-pandemic-covid19-coronavirus-recycling-sustainability/. Accessed 11 Aug. 2020.
92 https://www.weforum.org/agenda/2020/06/opportunities-circular-economy-post-covid-19/
93 “Pandemi Covid-19, Transaksi Daur Ulang Lewat MallSampah ...." 22 Apr. 2020, https://makassar.tribunnews.com/2020/04/22/pan-
demi-covid-19-transaksi-daur-ulang-lewat-mallsampah-naik-signifikan. Accessed 11 Aug. 2020.
94 "Daur Ulang Sampah, Meraup Penghasilan di Masa Pandemi ...." https://ekonomi.bisnis.com/read/20200511/257/1238656/daur-ulang-sampah-meraup-penghasilan-di-masa-pandemi-covid-19.
95 ‘Gender Dimensions of the COVID-19 pandemic’ World Bank (2020) http://documents1.worldbank.org/curated/en/618731587147227244/pdf/Gender-Dimensions-of-the-COVID-19-Pandemic.pdf
96 "Advocates call for targeted govt support to allay COVID-19 ...." 21 Jul. 2020, https://www.thejakartapost.com/news/2020/07/21/advo-
cates-call-for-targeted-govt-support-to-allay-covid-19-impacts-on-women-owned-smes.html. Accessed 11 Aug. 2020.
69
Women are often running small-scale businesses that have lower capacity to absorb the pandemic’s negative
impact on supply chains and consumer demand. 86% of over 200 women-entrepreneurs surveyed by UN
Women said that they are negatively affected by the pandemic while 34% of the respondents believe they
might have to close their operation entirely 97.
Some entrepreneurs, therefore, have to change their business strategy in order to survive the crisis. For
example, DuAnyam 98, which works with female artisans to produce handicrafts - experienced a decrease in
wholesale transactions due to the cancellation of company events and hotel closures. Management decided
to move sales online and focus on selling to individual consumers by developing cloth masks to respond to
growing safety needs.
6.2.4 MSMEs development and digitalization

Approximately 79% of Indonesian MSMEs reported that sales have decreased by a median of 50%. At the
same time, around 45% of enterprises that are importing and selling essential products reported an increase
in supply price due to disrupted supply chains.
The significant drop in sales and rise in prices is compounded by the fact that many MSMEs have little to no
cash reserves to survive prolonged crises due to the small size of their business and day-to-day nature of the
transactions. This liquidity problem pushes entrepreneurs to sell their company’s assets, seek loans, or use
their personal savings to cover business expenses. The Government of Indonesia has taken a more active
role in ensuring the survival of SMEs by lowering interest rates and relaxing rules to encourage restructuring
of institutional loans to SMEs.100
Indonesian businesses are adapting to ensure the survival of their customer-base and the sustainability of
their business in the long term.
For peer-to-peer (P2P) lenders, MSMEs have experienced difficulties in repaying loans due to
deteriorating financial conditions of their businesses. Modalku101, a crowdfunding platform for SME
financing, has implemented a more comprehensive screening process that might limit further lend-
ing to businesses in the food & beverage, travel, service in certain industries, but it is also boosting
lending in other sectors such as e-commerce. Some companies, such as Amartha, JULO, Koinworks
have said they will relax repayment policies where possible or offer restructuring plans for struggling
borrowers.
Many MSMEs are experiencing a decline in sales, and are therefore likely to reduce the use of
business service or products provided by social entrepreneurship supporting them. However,
some social enterprises have risen to the occasion to further support their MSMEs customers. For
example, in order to help small-time shrimp farmers survive the decline in export market, JALA102 is
activating a trading feature on their smart farming app to help smallholder farmers sell to local
markets, retailers and online and the company has bought shrimps at a slightly higher price than the
cold storage current price.
In order to combat the decline in sales due to physical distancing policies, accelerated digitaliza-
tion has been observed among the SMEs. A report by Sea Insight 103 mentioned that 50% of the
SMEs surveyed are increasingly utilising digital tools, such as social media, in their business opera-
tions, while 70% of entrepreneurs surveyed said that they will permanently increase their usage of
these tools. Additionally, 1 in 5 entrepreneurs surveyed who are selling more actively through online
channels are first time adopters.
97 "Asia-Pacific Needs Assessment for More Gender-Inclusive ...." https://asiapacific.unwomen.org/en/digital-library/publica-

tions/2020/06/asia-pacific-needs-assessment-for-more-gender-inclusive-entrepreneurship. Accessed 11 Aug. 2020.
98 "Melia Winata." https://mdhs.unimelb.edu.au/engage/alumni/covid-19/alumni-on-the-frontline/melia-winata. Accessed 11 Aug. 2020.
99 "Impact of the COVID-19 pandemic on MSMEs - Microsave." https://www.microsave.net/wp-content/uploads/2020/06/Impact-of-the-COVID-19-pandemic-on-MSMEs.pdf. Accessed 28 Jul. 2020.
100 "COVID-19 policy responses for those small enough to fail." https://www.youthcolab.org/small-enough-to-fail-covid19. Accessed 12 Aug. 2020.
101 "Modalku be Aware of the Increasing of Bad Credit due to ...." https://www.mime.asia/modalku-be-aware-of-the-increasing-of-bad-credit-due-to-covid-19-impact/. Accessed 11 Aug. 2020.
102 "Indonesian start-up adapts app to support shrimp farmers ...." https://www.idhsustainabletrade.com/news/indonesian-start-up-adapts-app-to-support-shrimp-farmers-during-covid19/. Accessed
11 Aug. 2020.
103 "Reimagining SME Recovery in Indonesia | by Nathan ...." 5 Jul. 2020, https://medium.com/seainsights/reimagining-sme-recovery-in-indonesia-f316cc770771. Accessed 3 Sep. 2020.
70
6.3. The impact of COVID-19 on supply-side of

impact investment
To better capture how COVID-19 has impacted the investors, we have taken a 2-steps approach to analyse
the impact of covid on supply-side stakeholders as below
Step Action
1: Impact Mapping Assessing changes in the investment opportunities landscape
Understanding adjustment according to the three reactions framework (change in

2: Adjustment Mapping
mission/strategy, change in “modus operandi” and change in value proposition)
Step 1: Impact Mapping

Change areas Impact for impact investors
Redefinition of impact priorities: The Government is redefining some priorities for impact
(SME development).
Impact opportunity Emergence of new impact areas: Marginalised populations that were not the priority of
impact investors have been deeply impacted (e.g. employees of F&B companies, manu-
facture staff).
New large market opportunities created: As an example, new healthcare and sanita-
tion-related business models may unlock new opportunities during this crisis. For exam-
ple, Halodoc104, an online medical platform, is offering a service for COVID-19 rapid test on
its platform. Seekmi, a new online platform for blue-collar jobs, says their new disinfection
service is in high demand 105 .
Market opportunity
Drive of tech-enabled businesses (e.g. online education platforms, online sustainable
grocery platforms) increase their customer base and create a long-lasting impact during
the social distancing period. Ruangguru 106, an online education platform, offers free
services to students and employees in self-quarantine, increasing their potential customer
base at the same time as creating positive social impact.
Valuation deflation: Valuations are typically cheaper in this crisis, investing in and
supporting these companies will increase their likelihood of survival and bounce-back
post-crisis, and may also provide greater financial return for investors.
Decrease of funding is impacting the fundraising strategies of social entrepreneurs and it
slows down the growth of several less priority markets.
Capacity pipeline and Increase filtering of quality entrepreneurs: COVID-19 has been a crash test to test the
funding availability resilience and ability to adapt to “new normal”.
Slowdown to raise new funds from private sectors: Securing funds from the capital
owner (i.e. LP limited partners) has become more difficult due to cautiousness of the
worsening global economy.
New funding for COVID-19: some capital owners have relaxed their requirements if the
funds are specifically mandated for COVID-19 relief support.
Step 2: Change/adjustment mapping

Impact Investors reaction to the pandemic can be classified into three distinct categories:
i) Change in mission strategy: Adapting their existing fundamental strategy (e.g. changing their invest-
ment thesis to incorporate COVID-19, setting up new instruments or setting up a new funds)
ii) Change in modus operandi: Shifting the way they conduct their operation (e.g. online due diligence,
shortening investment decision process or investment committee meeting)
iii) Change in value proposition: Providing immediate value-added activities for their portfolios (e.g.
portfolio support, hiring full-time employees for the investees or providing follow on or bridge fund-
ing)
104 "Panduan COVID-19 - Halodoc." 6 Apr. 2020, https://www.halodoc.com/artikel/panduan-covid-19. Accessed 12 Aug. 2020.
105 "Tokopedia, Lazada offer disinfection services via Seekmi tie-up." 20 May. 2020, https://www.techinasia.com/tokopedia-lazada-seekmi. Accessed 26 Aug. 2020.
106 "COVID-19: Tech startups offer free services to students ...." 18 Mar. 2020, https://www.thejakartapost.com/life/2020/03/18/-
covid-19-tech-startups-offer-free-services-to-students-employees-in-self-quarantine.html. Accessed 12 Aug. 2020.
71
Based on our in-depth interviews with 20 fund managers (14 of which are impact investors, 6 of which are
MIE), we found out that providing additional support for portfolio companies is the most common response
taken by fund managers. Further details of response of the funds that mentioned specific activity in tackling
the crises are presented below accompanied by examples.
Figure 6.2 COVID-19 specific responsive actions by selected impact investors and mainstream investors with impact exposures
COVID-19 Response # of respondents Examples of actions by respondents
Updating Updating the strategy to incorporate more digital payment and agritech
Investment 4
financial solutions in their focus
Thesis
Change in New Looking at opportunities to push debt products. Previously, this investor only
Mission Instrument 2
deployed their investment through equity or mezzanine debt instruments.
Strategy push
Raising a new COVID-19 resilient fund, which will provide loans for affected
New Fund 2
social enterprises.
Online
Due 6 Implementing a full online due diligence process
Change in Diligence
Modus
Operandi Shortening investment process to make the most of current commercial
Shorten
opportunities. Company valuations are generally cheaper compared to
Investment 3
pre-pandemic level, so it is a good timing to invest in viable companies who
Process
are scaling (Series B, early growth) at an attractive valuation
Developing PSP (portfolio support program) which includes support in

Portfolio
15 hiring and emergency relief for portfolio companies in Indonesia and
Change in Support
Vietnam.
Value
Preposition Follow on
/ Bridge Providing additional financial assistance for portfolio companies that
6
funding are affected by COVID-19.
72
6.4 Recommendations
In relation to combating the negative impact of the COVID-19 pandemic, we recommend industry stakehold-
ers consider the actions below.
Supply focus
Beyond the capital itself, the ability to quickly deploy is also crucial during this time of crisis.
Therefore, it is recommended to help fund managers improve their internal processes so that
they may effectively find new investment opportunities and improve the speed of their capital
disbursement.
Example: R3 Coalition by GIIN, which mobilizes virtual meetings to connect relevant impact
investors with investment opportunities.
While impact investors have been quite active in providing immediate support to portfolio
companies, the same rigor has not been seen from mainstream investors with an impact
portfolio. In order to further stimulate further activities from mainstream investors, as LPs,
private capital owners can provide capital injection for mainstream investors with initiatives to
combat COVID-19.
Entrepreneur (Demand) focus
Impact capital is now even more required to fill the financing gap especially since mainstream
investors tend to take a “wait and see” approach. Therefore, participating in providing emer-
gency financing programs for distressed social enterprises is critical.
Example: An initiatives by 50 leading global organizations,“COVID Response Alliance for
Social Entrepreneurs” to provide knowledge, experience and resources to affected Social
Enterprises
Tech-enabled social enterprises tend to get more spotlight during this pandemic and there-
fore more support from investors and other intermediaries. It is important therefore to
support other social enterprises that do not get much attention from the impact investing
ecosystem.
As mentioned above, the use of technology and online tools may help businesses survive
situations where social distancing is heavily required. Therefore, helping less tech-enabled
businesses explore their options in utilising technology is also recommended.
There is a lack of mental health support provided to entrepreneurs and their employees
despite the widely reported stress amongst society as a whole brought about by the
pandemic 107 . The decline in business performance and prolonged lockdown can result in
mental burnout of entrepreneurs and their employees, further affecting the long-term perfor-
mance and viability of social enterprises. As such, investors and capital owners need to pay
close attention to the mental health situation of the entrepreneurs and their team.
107 "COVID lockdown is world's biggest psychological experiment ...." 9 Apr. 2020, https://www.weforum.org/agenda/2020/04/this-is-the-psychologi-
cal-side-of-the-covid-19-pandemic-that-were-ignoring/. Accessed 12 Aug. 2020.
73
2020
Indonesia
Part 7
Conclusion
Part 7: Conclusion Investing in Impact in Indonesia - 2020
Conclusion
In the middle of the report development, Indonesia got affected by the Covid-19 pandemic. As many social
entrepreneurs, ANGIN operations and our own entrepreneur portfolio have been under unprecedented
pressure to adjust to economic disruptions, mobility reduction and social restrictions. The role of social entre-
preneurs has been more than ever critical in supporting the most vulnerable Indonesian economic actors and
population.
Whatever recent challenging context we are facing, our team closed this report with a note of hope and
excitement that strong progresses are in process in our ecosystem. It is encouraging to see new players
joining everyday, new success stories being drawn and new learnings being exchanged.
If we were to focus on our last three pieces of advice to existing, new and upcoming capital owners or inter-
mediairs on their impact endeavor in Indonesia:
Go entrepreneur first: Center your approach on entrepreneurs. Their success is the condition to
any investors, intermediaries or capital owners.
Go beyond stories: Enquire deeper into the real gaps, underserved impact and market opportuni-
ties to create long lasting changes.
Go local: Leverage local intermediaries who live in the country, face challenges and understand
the little details that make a difference in implementing support systems to entrepreneurs.
75
2020
Indonesia
Appendix
Appendix: Impact areas Investing in Impact in Indonesia - 2020
Impact areas
IRIS Thematic Taxonomy - adaption
Category Impact Focus Impact Theme Impact Premise
Social Smallholder agriculture Social: Smallholder agriculture

Food & Agribusiness
Environmental Sustainable agriculture Environmental: Sustainable agriculture
Social Smallholder farming Social: Smallholder agriculture

Fishery
Environmental Sustainable fishery Environmental: Sustainable fishery
Social Smallholder farming Social: Smallholder agriculture
Environmental Sustainable forestry Environmental: Sustainable forestry
Forestry & Land Environmental Biodiversity conservation Environmental: Biodiversity conservation
Environmental Ecosystem conservation Environmental: Ecosystem conservation
Environmental Climate change mitigation Environmental: Climate change mitigation
Affordable and
Education Social Social: Affordable and quality education
quality education
Affordable and
Healthcare Social Social: Affordable and quality healthcare
quality healthcare
Financial services Social Financial inclusion Social: Financial inclusion
Waste Environmental Waste management Environmental: Waste management
Social Access to clean water & Social: Access to clean water & sanitation
Water, sanitation, & hygiene
sanitation
Social Affordable quality housing Social: Affordable quality housing
Property & Real Estate
Environmental Green buildings Environmental: Green buildings
Environmental Renewable energy Environmental: Renewable energy
Energy Environmental Clean energy Environmental: Clean energy
Social Energy access Social: Energy access
Social Diversity & inclusion Social: Diversity & inclusion
Social Gender lens Social: Gender lens
Sector agnostic Social MSMEs Social: MSMEs
Social Bottom of pyramid Social: Bottom of pyramid
Social Employment Social: Employment
77
Appendix: Detailed methodology Investing in Impact in Indonesia - 2020
Detailed methodology
The research began with building a comprehensive database of both supply and demand-side of Invest-
ing in Impact in Indonesia from secondary sources such as ANGIN Proprietary databases, company web-
sites, press search, and publications.
We followed a unique 6-step approach to capture the deployment of capital into impact in Indonesia.
Appendix - 01 Detailed methodology
Supply
YES Self-declared as an impact investor

(on the website etc)
NO
Investing in enterprises in NO
impact premises IRIS
YES
Invest in certain number of NO

SE1 / SE2 / EI
YES
Impact Mainstream
Out of scope
investors (II) investors (MIE)
Demand
YES
Invested by Impact Investors
NO
Operating in NO
impact premises IRIS
YES
Have impact mission and

measurement
YES NO
SE1 SE2 EI Out of scope

1
78
Appendix: Detailed methodology Investing in Impact in Indonesia - 2020
Step 1: Identifying Impact Investors in Indonesia - (Code II)

The report focuses first on explicit Impact Investors (II) with existing portfolios in Indonesia, who are
actively investing in Indonesia or who are prospecting in Indonesia. The explicit mention to impact
investment is usually stated on the website or commercial documents, and is declared during
panels and events.
Step 2: Identifying Social Enterprises funded by Impact Investors - (Code SE1)

From the list of Impact Investors, we extracted their portfolio to identify in which companies these
impact investors have invested in. We label such enterprises as Social Enterprise 1 (SE1) under the
assumption that all Impact Investors would only invest in social enterprises.
Step 3: Identifying Enterprises operating in Impact Areas - (Code EI)

We also identified additional enterprises which have been funded by mainstream investors over
the past 10 years in Indonesia. We analyzed the enterprises area of operation against IRIS+ themat-
ic themes established by GIIN (see Appendix A. Impact Areas). Those enterprises operating within
the impact Areas are classified as Enterprise in Impact Areas (EI) and those which do not, are classi-
fied as Mainstream Enterprises (ME) and will not be considered in the report.
Step 4: Identify additional Social Enterprises - (Code SE2)

From the list of EI, we are pursuing our analysis to understand if any of these EI could be classified
as social enterprises as per the definition. If the EI is stating an impact mission/objective and a mea-
surement of this impact, we classify this EI as a Social Enterprise (SE2 in our coding).
Step 5: Identifying Mainstream Investors

From the list of “Step 2, 3 and 4”, we identified mainstream investors (MI) who invested in the SE1,
SE2 and EI.. These mainstream investors typically represent Venture Capital (VC) firms, Private
Equity (PE), Corporates who are not explicitly declared themselves as impact investors.
Step 6: Mainstream Investor with Impact Exposure - (Code MIE).

Lastly, we further identified the portfolio composition of mainstream funds investing in both
SE and EI. If they fulfil at least one of the following criteria...
At least one investment in SE1 (co-investment with impact investors)
or, at least two investments in EI
or, at least two investments in SE2
...we would identify this mainstream investor as Mainstream Fund with Impact Exposure
(MIE).
79
Appendix: Case studies Investing in Impact in Indonesia - 2020
Case studies
Case studies are available on demand
Please contact: david@angin.id
Fund Manager Sample
Background and overview Background and overview
Impact thesis Impact measurement Impact reporting
Fund Management Analysis
Fully invested or closed Currently investing Fundraising in progress
2015 - Fund I 2015 - Fund II 2015 - Fund III 2015 - Fund IV
Fund Management Analysis
Portfolio Brief description Deal information Impact Areas Impac Outcome Latest development
Learning and reflection
80
Appendix: Additional tables Investing in Impact in Indonesia - 2020
Additional tables
Table 1 Impact investors
Where (historically)
Observation based on impact deals
from 2018-20 (43 impact deals Where (forward) Example
observed by impact investors to
Social Enterprises)
Sector/industry Food Agribusiness Financial services

(30% of deals) Food & agribusiness
Forestry & Land
Financial Services
(28% of deals)
Business model 51% tech Balanced distribution between During the first phase of impact
49% non tech tech & tech investing, there was a prefer-
ence to non-tech enterprises
(70% of impact deals). However,
in the 2nd and 3rd phase, the
distribution is getting balanced
between tech & non tech type of
enterprise.
Type of growth Slow growth focusing on impact Fast, controlled
Impact theme Social: Financial Inclusion Financial inclusion & environ- 4 forestry specialized fund with
(28% of deals) mental protection theme high ticket size investment for
forestry & land related enterpris-
Environmental: Sustainable es. i.e. USD 95 million invest-
Agriculture ment to PT Royal Lestari Utama
(19% of deals) and USD 30 million to PT
Dharma Setya Nusanatara
Geographies HQ of invested social enterprises: Discussion to bring impact Northstar foundation is looking
Jakarta (70%) investment to second and third into East Nusa Tenggara (NTT).
Aceh (7%) tier cities
West Java (7%)
Beneficiaries Farmers, unbanked rural citizen Farmers, unbanked rural citizen

(will still target this sector &
beneficiaries)
Stage Early stage (seed & series A): Growth, expansion Notable growth stage invest-
57% ment with > USD 10 million ticket
Series C round for Fabelio,
Growth stage (series B & C): 43% Ruang guru and Modalku
*Only from disclosed data
Series B round for Amartha &
Halodoc
81
Table 2 Mainstream investors
Where (historically)
Observation based on 151
enterprises that hasn’t received Where (forward) Example
funding from Impact investors
(2013-2020)
Sector/industry Financial Services Fintech, education, healthcare Due to pandemic & lockdown,
(32% of total enterprises) health tech & edutech are
receiving more users.
Sector Agnostic (not in any
impact category defined by
IRIS+) 23% of total enterprises
Business model 92% tech Balanced distribution between During the first phase of impact
8% non-tech (based on total tech & tech investing, there was a prefer-
deals) ence to non-tech enterprises
(70% of impact deals). However,
in the 2nd and 3rd phase, the
distribution is getting balanced
between tech & non tech type of
enterprise.
Type of growth Putting more attention towards Tone down on growth, started to
growth emphasize on sustainability
Impact theme 32% financial inclusion Financial Inclusion

12% smallholder agriculture Msmes empowerment
11% MSMEs development
Geographies 89% Jakarta Will still be focused on Jakarta

5% West Java
6% Other (Bali, NTT, West Suma-
tra, Yogyakarta)
Beneficiaries Unbanked & MSMEs Unbanked & MSMEs
Stage Early stage (seed & series A): Growth, Expansion

76%
Growth stage (series B & C): 15%
Exit (Acquired & IPO) : 9%
82
Table 3 Number of Impact Investors and Mainstream Investors by specific categories
Impact Investors (II) Profile
Category Additional descriptions # of investors
Based on domicile Total 66
Foreign Fund Investors with decision making outside Indonesia 61
With local rep - With employee(s) in Indonesia 23
Without local rep - Without employee(s) in Indonesia 38
Local Fund Investors with decision making or HQ in Indonesia 5
Based on number of investments Total 66
Prospecting 16
1 investment 27
> 1 investment 23
Mainstream Investors with impact exposures (MIE) Profile
Category Additional descriptions # of investors
Based on domicile Total 107
Foreign Fund Investors with decision making outside Indonesia 75
With local rep - With employee(s) in Indonesia 51
Without local rep - Without employee(s) in Indonesia 24
Local Fund Investors with decision making or HQ in Indonesia 32
Based on number of investments Total 107
Prospecting 18
1 investment 67
> 1 investment 22
83
Table 4 Number of Impact Investment Deals Made by impact Investors and Mainstream Investors by specific categories
Impact Investors (II) Investment Deals
Category Additional descriptions # of investments
Sectors Total 83
Financial services 22
Natural resources Inc. Fishery, Food & Agribusiness, Forestry & Land 33
Sector agnostic Not in IRIS+ impact category 14
Others Inc. Education, Energy, Healthcare, Waste, Water 14
Tech-enabled Total 83
Yes 45
No 38
Gender-frame Total 83
Women-led Enterprises with women at executive level 16
Non women-led Enterprises without women at executive level 67
Mainstream Investors with impact exposures (MIE) Investment Deals
Category Additional descriptions # of investments
Sectors Total 37
Financial services 15
Natural resources Inc. Fishery, Food & Agribusiness, Forestry & Land 4
Sector agnostic Not in IRIS+ impact category 12
Others Inc. Education, Energy, Healthcare, Waste, Water 6
Tech-enabled Total 37
Yes 33
No 4
Gender-frame Total 37
Women-led Enterprises with women at executive level 8
Non women-led Enterprises without women at executive level 29
Table 5 Number of Impact Investment Deals by years

Impact deals by Year
Year Impact Investors (II) Mainstream Investors (MIE)
2013 4 0
2014 5 0
2015 9 1
2016 7 6
2017 12 3
2018 15 8
2019 19 16
2020 12 3
Total 83 37
84
Table 6 Detailed investment team profiles in selected impact investors in Indonesia
Analyst / Middle
Topic Partner Level Overall
Associate Level Management Level
Have experience in:
Finance related 67% 70% 50% 62%
Entrepreneur / Start-up 33% 40% 50% 42%
Corporate 33% 30% 40% 35%
Consulting 33% 20% 40% 31%
Non profit / DFI / Gov 17% 20% 20% 19%
Gender
Male 67% 60% 90% 73%
Female 33% 40% 10% 27%
Nationality
Indonesian 100% 70% 60% 73%
Foreign 0% 30% 40% 27%
Graduate / Post Graduate Education
Yes 50% 90% 70% 73%
No 50% 10% 30% 27%
Foreign Educated
Yes 67% 90% 80% 81%
No 33% 10% 20% 19%
Employee Count 6 10 10 26
Team Structure (Number of fund managers) (%)
Partner Only 2 14%
Middle Management Only 5 36%
Analyst / Associate Only 2 14%
Partner + Middle Management 3 21%
Partner + Analyst / Associate 1 7%
Complete 1 7%
Total 14 100%
85
Table 7 Breakdown of social enterprises by selected categories
Social Enterprises Enterprise

in Impact
SE1 SE2 Areas
Classification of Social enterprise Funded by Funded by Funded by

Impact Mainstream Mainstream
Investors Investors Investors
71 20 129
Education 3% n/a 10%
Energy 1% 14% n/a
Financial services 23% 14% 36%
Fishery 8% n/a 1%
Impact Food & agribusiness 27% 14% 20%

category
Forestry & land 6% n/a n/a
Healthcare 3% n/a 12%
Sector agnostic 18% 45% 19%
Waste 8% 14% 2%
Water, sanitation & hygiene 3% n/a n/a
Non-tech 52% 23% 5%

Tech/
non-tech based Tech 49% 77% 95%
Women Led 19% 5% 12%

Founder
gender Non-Women Led 74% 86% 87%
Unknown 6% 9% 1%
Jakarta 64% 77% 91%

Location
Outside Jakarta 36% 23% 9%
Early Stage (Seed & Series A) 70% 68% 85%

Company
stage Growth Stage (Series B above) 12% 27% 8%
Late Stage (Mature, Exit, Public) 18% 4% 6%
86
Table 8 Previous research the number of social enterprises in Indonesia
Source Year Methodology Estimation Limitation of Study
108
British Council, 2019 Assumes a 1.5% rate of social 342,025 Definition of social enterprise includes
USAHA Social enterprise presence within the NGOs and social businesses.
total number of SMEs. The study did not verify whether the enter-
prises had the characteristics of a social
enterprises: impact intention, impact
measurement and for-profit model.
BCG, The Art of 2015 Identified tech- and non-tech 1,400 No quantitative analysis was conducted
Sustainable based business models that for the purpose of research
Giving deliver a social purpose.
Number derived from best data

available using proxy for actual
figures.
Table 9 Estimated number of total social enterprises in Indonesia
Findings Assumptions
Funding success rate 1% Assumption: The average success rate of enterprises getting
funded by institutional investors based on ANGIN’s experience
and investor feedback in Indonesia.
Total number of social enterprises 9,100 Assumption: The number of social enterprises (91) that have
applying for funding been funded by investors represents an estimated 1% of the
total applicants (based on industry average).
% of Social Enterprises in Indonesia who 5% Assumption: 95% of social enterprises in Indonesia are
have applied for funding self-funded or bootstrapping, similar to most SMEs or coopera-
tives according to observation.
Total number of Social Enterprises in 182,000 If 5% (9,100) social enterprises in Indonesia are funded then
Indonesia (estimated) there are approximately 182,000 overall.
108
“Millennials lead social enterprise surge in Indonesia - Pioneerpost.” https://www.pioneerspost.com/news-views/20181217/millenni-
als-lead-social-enterprise-surge-indonesia#:~:text=It%20estimates%20there%20are%20more%20than%20342%2C000%20social%20enterprises%20in%20the%20region.&text=Unlike%20other
%20countries%20in%20the,worked%20in%20the%20creative%20industries. Accessed 27 July 2020.
87
Table 10 Commitments on GLI
Type Fund Manager Additional GLI Commitment for 2019 onwards
Patamar Capital Launched USD 50 million Beacon Fund that are targeting Women-led SMEs
in SEA (majority Indonesia) -USAID and DFAT backed.
Bamboo Capital Partners Currently raising USD 50 million Care Bamboo Impact Fund for “Gender
Just” investment in South Asia & SEA (starting with Indonesia & Cambodia).
Impact Investors
(II) IIX Currently raising IIX Women Livelihood Bond Series 3.
Moonshot Ventures Currently raising for IWEF in partnership with YCAB Ventures, and support-
ed by Investing in Women by DFAT Australia.
ADB Ventures Actively looking for businesses with gender empowerment impact.
Teja Ventures USD 10 million Gender Lens Funds targeting Southeast Asia (focused on
Indonesia), China, and India. Teja Ventures views gender lenses not only
Mainstream from an impact perspective but also as levers to identified untapped invest-
investors with ment opportunities.
impact exposure
(MIE) Gobi Venture Pledged USD 50 million to invest in women founders by 2020 across funds.
Gobi also conducted performance assessment of gender lens in their fund’s
global portfolio and highlight gender lens/women led ventures in deal flows.
*based on press review and interviews
Table 10 Entrepreneurs’ expectation on impact investors
Data collected from online surveys
Entrepreneurs based in Jakarta
Entrepreneurs based outside Jakarta
They most likely will understand

my vision and mission
They have strong expertise/expe

rience to support my enterprise
They understand my sector better

while few other investors do
They help me measuring my social

impact or achieve my impact objective
They bring me more than money

especially in training, mentoring
They are more hands-on/active and will be

very close to me running my enterprise
They are more hands-off and leave me

more freedom running my enterprise
They offer more flexible capital or

payment terms
They are quick at making decisions

and require less documentation
I did not have any expectations

and was totally blind
0% 5% 10% 15% 20%
88
PT ANGIN UTAMA JAYA
managing ANGIN (Angel Investment Network Indonesia)
Wework, Revenue Tower, Jalan Jend. Sudirman
Jakarta Selatan, Indonesia
contact@angin.id www.angin.id

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5.1 Government intervention evolution since 2013 60

Appendix: Impact areas 77

ANGIN Research Team

David Soukhasing Benedikta Atika

Research Co-lead Research Co-Lead

Stevie Susanto Aisha Nadira

Research Co-Lead Research Associate

Serly Marcelina Erik Hormein

Research Associate Research Associate

Vicky Lay Saskia Tjokro

Main Research Advisor Research Advisor

Monica Yusuf Victoria Forsgate

Research Advisor Editor

Alexander Irwan Marcel Neutel

Steve Rhee Maria Natashia

Abindra Soemali Martin Tang

Aruna Pradipta Mirko Zuerker

Bangkit Oetomo Nadia Fonny

Daniel Hersson Rani Sofjan

Dondi Hananto Regula Schegg

Edward Ismawan Chamdani Samir Chaibi

Elizabeth Tan Stefanus Suharjono

Ganesh Rengaswamy Tom Schmittzehe

Joshua Agusta Virginia Tan

Jugnu Pati Vivi Laksana

Kevin Moon William Gozali

Section Objectives for General Audience Objectives for Capital Owners

Increase public awareness and under- Identify potential recipients for

Showcase the best practices from major

Identify fund managers targeting key

Data accessibility and availability

Smaller institutional investors are not producing such reports.

Remote collection of primary data

Explicit motivation of an organization to create social and/or environmental impact. The

Pipeline The availability of investible enterprises.

Funding availability The availability of funds to be invested in enterprises.

Investor (Supply-side) Category

Enterprise (Demand-side) Category

ANGIN Angel Investment Network Indonesia

AVPN Asian Venture Philanthropy Network

DFAT The Department of Foreign Affairs and Trade (of Australia)

DFI Development Finance Institution

EIA Enterprise in impact areas

GIIN Global Impact Investing Network

GLI Gender Lens Investing or Gender Lens Investment

IRIS Impact Reporting and Investment Standards

IRR Internal rate of return

MIE Mainstream investor in impact premises

MSME Micro, small & medium enterprise

OJK Otoritas Jasa Keuangan (Indonesian Financial Services Authority)

SDGs Sustainable Development Goals

YCAB Yayasan Cinta Anak Bangsa

Impact focus Financial focus

Philanthropist Mainstream investor

Impact focus Balanced focus Financial focus

Philanthropist Impact investor Mainstream investor

NGO Social Enterprise Mainstream enterprise

Impact Impact + Profit Profit

Figure C. Supply-side stakeholders operating within impact areas

Characteristics Philanthropy Impact investor (II) Mainstream investor (MI)

Clearly stated impact intention Yes Yes No

Both impact and profit are